Indonesian Muslim Fashion Ranks Among Top 3 Globally

As the world grapples with the lingering impacts of the COVID-19 pandemic, Indonesia is strategically positioning itself to become a global hub for the halal industry. With a burgeoning Muslim population and a vibrant economy, Indonesia’s ambition is to leverage its resources to dominate sectors like halal food, Islamic fashion, and halal-certified pharmaceuticals and cosmetics.

Over the past two years, Indonesia’s halal industry has shown impressive growth. According to the latest “State of the Global Islamic Economy Report,” the nation climbed eight spots to rank fourth globally in halal food production. This sector is not just expanding—it’s becoming a cornerstone of Indonesia’s economy.

The fashion scene is equally dynamic. Indonesia now holds the third spot worldwide in Muslim modest fashion, a testament to its innovative designs and cultural heritage. But it’s not just about apparel. The country has also made significant strides in the halal pharmaceutical and cosmetics sector, where it recently jumped 19 places to rank sixth globally.

Dody Widodo, Secretary General of Indonesia’s Ministry of Industry, emphasized the scale of investment in these sectors. From 2018 to 2021, Indonesia saw 80 major transactions, including mergers, acquisitions, and venture capital investments, particularly focused on halal food and Sharia-compliant finance. “These sectors not only reflect our cultural identity but are also pivotal in our journey from a top consumer market to a leading exporter of halal products,” Widodo stated during a press conference in Jakarta.

The government’s strategy includes streamlining halal certification processes, particularly for small and medium-sized enterprises, and establishing dedicated halal industrial areas. Recent initiatives have led to the certification of several new halal industrial zones, such as Halal Modern Valley in Serang and Bintan Inti Halal Hub in the Riau Islands, which are set to become major players in the global halal market.

In recognition of these efforts, the Ministry of Industry hosted the 2021 Indonesia Halal Industry Awards (IHYA), celebrating the innovators and academics who propel this sector forward. “The ‘ihya’, meaning ‘to revive’ in Arabic, symbolizes our commitment to invigorate the Sharia economic ecosystem,” Widodo explained.

Finance Minister Sri Mulyani Indrawati highlighted the resilience of the halal market during the global health crisis, noting that global spending on halal products reached $2.2 trillion in 2019, with a growth rate surpassing global economic trends. “Indonesia, as part of the G20 and a nation with significant economic heft, is uniquely positioned to capitalize on this demand, fulfilling both domestic and international needs,” she said.

Further emphasizing the role of innovation, Minister of Cooperatives and SMEs, Teten Masduki, called for deeper integration of MSMEs into the halal product supply chain. Through partnerships with giants like Unilever and the establishment of innovation centers, Indonesian MSMEs are expected to gain technological and business insights, boosting their contribution to the industry.

With these concerted efforts and multi-stakeholder collaborations, Indonesia is not just participating in the global halal market; it is actively shaping its future. The nation’s strategic moves are set to create a ripple effect, potentially positioning Indonesia as a leader in the global halal industry.