Understanding Concept of Halal Industry

UNDERSTANDING CONCEPT
OF HALAL INDUSTRY
Sanksi Pelanggaran Pasal 113
Undang-Undang No. 28 Tahun 2014 Tentang Hak Cipta
1. Setiap Orang yang dengan tanpa hak melakukan pelanggaran hak ekonomi
sebagaimana dimaksud dalam Pasal 9 ayat (1) huruf i untuk Penggunaan
Secara Komersial dipidana dengan pidana penjara paling lama 1 (satu)
tahun dan/atau pidana denda paling banyak Rp 100.000.000 (seratus juta
rupiah).
2. Setiap Orang yang dengan tanpa hak dan/atau tanpa izin Pencipta atau
pemegang Hak Cipta melakukan pelanggaran hak ekonomi Pencipta
sebagaimana dimaksud dalam Pasal 9 ayat (1) huruf c, huruf d, huruf f,
dan/atau huruf h untuk Penggunaan Secara Komersial dipidana dengan
pidana penjara paling lama 3 (tiga) tahun dan/atau pidana denda paling
banyak Rp 500.000.000,00 (lima ratus juta rupiah).
3. Setiap Orang yang dengan tanpa hak dan/atau tanpa izin Pencipta atau
pemegang Hak Cipta melakukan pelanggaran hak ekonomi Pencipta
sebagaimana dimaksud dalam Pasal 9 ayat (1) huruf a, huruf b, huruf e,
dan/atau huruf g untuk Penggunaan Secara Komersial dipidana dengan
pidana penjara paling lama 4 (empat) tahun dan/atau pidana denda paling
banyak Rp 1.000.000.000,00 (satu miliar rupiah).
4. Setiap Orang yang memenuhi unsur sebagaimana dimaksud pada ayat (3)
yang dilakukan dalam bentuk pembajakan, dipidana dengan pidana
penjara paling lama 10 (sepuluh) tahun dan/atau pidana denda paling
banyak Rp 4.000.000.000,00 (empat miliar rupiah).
OF HALAL INDUSTRY
Lidia Desiana, S.E., M.Si
Aryanti, S.E., M.M.
Fernando Africano, S.E.I., M.Si.
Muhamad Rahman Bayumi, S.E., M.E.
OF HALAL INDUSTRY
Penulis:
Lidia Desiana, S.E., M.Si.
Aryanti, S.E., M.M.
Fernando Africano, S.E.I., M.Si.
Muhamad Rahman Bayumi, S.E., M.E.
Editor Naskah
Fernando Africano, Alvin Laili Qomariyah
Hussein Mohamed Hussein Elghowail (Misurata Univesity)
Tata Letak
Alvin Laili Qomariyah
Desainer:
Alvin Laili Qomariyah
Sumber Gambar Cover:

www.freepik.com
Ukuran:
viii, 89 hlm., 17,6 cm x 25 cm
ISBN:
978-623-8506-09-5
Cetakan Pertama:
Desember 2023
Hak Cipta Dilindungi oleh Undang-undang. Dilarang menerjemahkan,

memfotokopi, atau memperbanyak sebagian atau seluruh isi buku ini
tanpa izin tertulis dari Penerbit.
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FOREWORD
praise be to God SWT who has given his mercy and wisdom
so that author can complete the book with the title UNDERSTANDING
CONCEPT OF HALAL INDUSTRY well.
This book contains an overview of the halal industry. The discussion of
the material presented is simple but structured, making this book easy to
understand for readers who want to develop insight into the halal industry.
The presentation of the material began by understanding the meaning of the
word halal in industry, opportunities and challenges of the halal industry,
halal industry roadmap, halal system and certificationin Indonesia, halal
product assurance system, socialization and education of halal products, and
discussion of each sector of the halal industry.
The author would also like to thank the relevant parties who have
helped the compiler to complete this book. The author realized that this book
had flaws. For this reason, the compiler please for constructive criticism and
suggestions. Hopefully this book can provide readers with broader insight into
the concept of the halal industry.
Palembang, November 2023
Writer
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ii | Understanding Concept Of Halal Industry
INTRODUCTION
growth is understood as the ability of the state to continue to
maintain or increase capacity to meet the economic needs of the people and
the state. One indicator of economic growth is the high production of goods
and services produced by a region.
The current global market conditions when based on the needs and
preferences of many Muslim around the world have given rise to strong
competition in the industry. This creates opportunities for companies,
especially in emerging markets to take advantage of the halal product market.
The halal industry sector is increasingly attracting the attention of policy
makers and entrepreneurs as an industry with increasing growth potential.
This fact shows that the halal industry has attracted many countries such as
Thailand, Singapore, and the Philippines who are aware of the development
of halal products. Other countries such as Australia and the Unites States are
also scrambling to take this opportunity to become producers of halal
products.
Data on the population and purchasing power of Muslims around the
world today show an increase and strengthening of halal lifestyle trends
among them. For the 1,6 billion Muslim population, halal lifestyle is becoming
a new pattern. This is reinforced by the State of the Global Islamic Economy
2022 which reports that current halal business and industry trends continue
to show progress, including businesses in the halal food sector, halal tourism,
halal media and recreation, halal pharmaceuticals and cosmetics. Currently,
halal coverage is not only the food aspect, but the entire aspect of daily human
life. Included in the Islamic financial industry. Bank the halal industry in
global trade continues to increase, both on the demand and supply sides. This
development is actually based on the increasingly selective muslims in sorting
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products that clearly must be in accordance with their teachings so that halal
can be better maintained. Because as a muslim, before consuming anything
he is obliged to ascertain the legal status of the food or drink he consumes and
the services he uses.
Halal is a term that refers to objects or actions that are allowed to use
or engage under Islamic law. Halal in Arabic means permitted. Generally, the
term halal is used in relation to food, but the concept of halal applies to all
aspects of life. No longer just a religious obligation or observance for muslims,
halal has become a powerfull market force, becoming an increasingly
worldwide phenomenon for both muslims and non-muslims. The addition of
“halal” to a product is not only a guarantee that it is permissible for muslims,
but also a global symbol for quality assurance and lifestyle choices. This is
evident by the participation and involvement of non-muslim countries. Many
western countries have recognized the growing global trend in consumerism
towards halal products and services, and have now been vying for a foothold
in the halal industry. The sizable and growing muslim consumers market
worldwide will continue to drive the growth of the halal industry and create a
plethora of opportunities in the market for halal products and services.
Industry it self is an economic activity that processes raw goods, raw materials,
semi-finished goods or finished goods to be used as goods of higher use. So
the Halal Industry is an industrial activity that starts from the acquisition of
raw materials, processing, to producing halal products must use resources and
in a way permitted by Islamic law. Currently, the government has also
required business actors to have halal certification for their processed
products (Regulation of the Minister of Religious Affairs of the Republic of
Indonesia Number 20 of 2021).
The demographics of Muslims have undergone significant changes in
recent years. The growing Islamic consumerism among urban middle-class
muslims in countries with large muslim populations such as Indonesia,
Pakistan, and Turkey has set a new trend in the halal market. This is reflected
in the proliferation of increasing religious-themed products and services
including banking, tourism, and fashion. Therefore, modern muslims using
halal products are not only acceptable from a religious point of view, but also
they instill a sense of pride and confidence. The halal industry in Indonesia
has become one of the most competitive industries and has promising
business industry prospects. The factors are internal social and political forces
iv | Understanding Concept Of Halal Industry

in Indonesia with the largest muslim population in the world and the
obligation to issue halal certification to producers.
That’s why this paper is compiled in order to find out more about the
concept of the halal industry and how the development of the halal industry
today. Book writing is also a form of disseminating information to the public
in the academic environment, as well as in the wider community. For this
reason, we as part of the academic community present a bookchapter as a
form of implementation of the Tri Dharma of Higher Education. “Economic
Bookchapter Volume 1” consist of seven chapters written by Lidia Desiana,
S.E., M.Si; Aryanti, S.E., M.M; Fernando Africano, S.E.I, M.Si; Muhamad
Rahman Bayumi, S.E., M.E; Sri Delasmi Jayanti, S.E., M.Si; Aziz Septiatin, S.E.,
M.Si; Rachmania, S.E., M.Si; Bunga Mar’atushalihah, S.E., M.A; Alvin Laili
Qomariyah; Muhammad Tegar Pratama; Mitra Amelia; Popi Marsela; Desti
Fitri Hotimah; Vinka Cindy Meidelin; Afifah Nuraisyah; and Della Delvia. The
presence of a book chapter entitled Understanding Concept Of Halal Industry
compiled by several students and lecturers of UIN Raden Fatah Palembang is
very important to read and apply. This Book Chapter explains the concept of
halal industry in the fields of Islamic finance, halal food and beverages, halal
fashion, sharia pharmaceuticals, Muslim-friendly tourism, sharia media and
entertainment and halal certification. The author realizes that this
bookchapter is still not perfect, so the author accepts constructive
suggestions. Hopefully this bookchapter will be usefull for readers.
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vi | Understanding Concept Of Halal Industry
TABLE OF CONTENTS
FOREWORD ............................................................................................ i
INTRODUCTION ...................................................................................iii
TABLE OF CONTENTS .......................................................................... vii
CHAPTER 1 SHARIA FINANCE INDUSTRY .............................................. 1
A. Development of Sharia Finance Industry.................................................1
B. Types Of Sharia Finance Industry ........................................................... 4
C. The Existence of the Sharia Financial Industry as an Actor in the
Economic Wheel in Indonesia ................................................................. 9
CHAPTER 2 HALAL FOOD AND BEVERAGE INDUSTRY .......................... 11
A. Development of Halal Food and Beverage Industry .............................. 11
B. Understanding Halal in the Food and Beverage Industry ..................... 13
C. Halal Regulations and Certification .......................................................14
D. Challenges in Producing Halal Food and Bavarage Industry ................ 15
E. The Importance of the Halal Food and Beverage Industry in the
Economic and Health Context ............................................................... 17
F. Latest Innovations and Developments in the Halal Food and
Beverage Industry ....................................................................................18
CHAPTER 3 HALAL FASHION INDUSTRY ................................................... 21
A. Definition of Halal................................................................................... 21
B. Definition Halal Industry ....................................................................... 22
C. Challenges for the halal industry in Indonesia ..................................... 23
D. Development of the Halal Industry in Indonesia ................................. 24
E. Halal Fashion .......................................................................................... 25
F. Fashion industry opportunities halal in Indonesia............................... 30
G. Market opportunities for halal fashion products.................................. 32
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H. Halal E-commerce .................................................................................. 33
CHAPTER 4 HALAL PHARMACY INDUSTRY ............................................ 39
A. Definition of Pharmaceutical Industry ................................................. 39
B. Pharmaceutical Company ...................................................................... 40
C. The Importance of the Halal Pharmaceutical Industry ........................ 40
D. Growth of the Halal Pharmaceutical Industry in Indonesia ................ 42
E. Challenges of the Halal Pharmaceutical Industry ................................ 44
CHAPTER 5 MUSLIM FIENDLY TOURISM INDUSTRY ............................ 47
A. Basic Concept Of Halal Tourism ........................................................... 47
B. Halal Tourism To Support The National Economy ............................... 51
C. Transformation Of Halal Tourism......................................................... 53
CHAPTER 6 ASS COMMUNICATION SHARIA .......................................... 55
A. Halal Media and Recreation .................................................................. 55
B. Media and Entertainment Regulations in Indonesia............................ 56
C. Development of Indonesian Halal Media and Recreation ................... 58
D. Opportunities for the Halal Media and Entertainment Industry in
Indonesia ................................................................................................ 62
E. Challenges of the Halal Media and Entertainment Industry in
Indonesia ................................................................................................ 63
F. Comprehensive Legal Framework for the Media and Entertainment
Industry in Indonesia ............................................................................. 64
CHAPTER 7 HALAL CERTIFICATION .......................................................... 67
A. History and Development of Certification in Indonesia ...................... 67
B. Definition Halal Certification ................................................................ 72
C. Benefits of Halal Certification ............................................................... 74
D. Halal Certification and Halal Product Guarantee ................................ 76
E. Production Facility Requirements and Documents for Halal
Certification ............................................................................................ 77
F. Halal Certification Registration Process ............................................... 78
G. Halal Certification Processing Fees ....................................................... 78
CONCLUSION .................................................................................................. 79
REFERENCES ................................................................................................... 81
viii | Understanding Concept Of Halal Industry

Chapter 1
SHARIA FINANCE INDUSTRY
Lidia Desiana, S.E., M.Si., Muhammad Tegar Pratama
A. Development of Sharia Finance Industry

In line with the advancement of knowledge, the understanding of the
Muslim community in Indonesia regarding Sharia teachings continues to
expand, especially in the context of financial transactions in accordance with
Sharialaw. This phenomenon creates significant opportunities in Indonesia's
economy to develop a Shariah-based Financial Industry, enabling Muslims
who seek transactions in line with Sharia principles to be realized effectively.
This initiative encourages the economic system in Indonesia to establish
financial institutions adopting Shariah principles, with the aim of realizing an
economy aligned with Sharia teachings.Nevertheless, the interest of the
Muslim community in Shariah financial industries is still far lower compared
to their enthusiasm for conventional financial industries, as seen in the slow
development of Sharia banking in expanding market share.This is influenced
by several factors, including the materialistic nature of society, which tends to
prioritize high profits over adherence to Shariah financial principles
prohibiting usury. Lack of awareness about Shariah financial industries
among the public and the insufficient support from Shariaorganizations in
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Indonesia, such as Nahḍlatul Ulama’ and Muhammadiyah, rejecting usury,
also play a role in this low interest (Darmawan, 2020: 153).
Despite these three factors negatively impacting public interest in
Shariah financial industries, the industry continues to grow rapidly over time.
This development is largely the result of transforming Shariah financial
institutions from their previous conventional nature. Although Indonesian
society tends to prefer conventional financial industries due to a lack of
knowledge about Shariah financial industries, this poses a challenge for
Shariah financial industries to educate the public and explain their
mechanisms.
Overview of ShariaBanking Industry Worldwide
Figure 2. Overview of ShariaBanking Industry Worldwide

Source: The banker, KFHR, Bloomberg, Shariafinancial services industry
stability report (2022) page.26
The breakdown of global Shariabanking assets worldwide in

percentage. Iran is the market leader in Shariabanking industry by retaining
40 percent of the global Shariabanking assets followed by Saudi Arabia,
Malaysia, U.A.E. and Kuwait with 14 percent, 10 percent, 9 percent and 9
percent respectively. However, countries like Turkey, Bahrain, Indonesia,
Egypt and Sudan retains about 1 percent global Shariabanking assets
share.The journey of Shariabanking continued successfully from the last four
decades, in terms of market penetration and size as well.(Caniago, M.
A.I.2023)
2 | Understanding Concept Of Halal Industry

Sustainability Dimensions for Banks
Figure 2: Understanding the concept of sustainability

1. Social sustainability dimension for banking industry
The social sustainability aspect of the banking industry focuses on
mitigating the societal impact of banking activities. To attain social
sustainability, the banking sector must establish ethical standards
promoting equality in lending, encompassing small entrepreneurs,
medium-sized businesses, and large enterprises. In addition to ethically
driven lending practices, social sustainability in the banking industry
involves active participation of banking personnel in community
fundraising, charitable activities, and philanthropy.
2. Environment sustainability dimension for banking industry
Environmental sustainability in the banking sector revolves around
avoiding and minimizing the adverse effects of banking activities on the
environment. Banks can promote environmental sustainability by
refraining from funding organizations whose operations negatively impact
the green environment. Conversely, they can provide funds to entities
engaged in renewable energy projects and initiatives. To assess
environmental and social sustainability, specific key performance
indicators have been identified by the Global Reporting Initiative (GRI).
However, it's important to note that the discussion of social and
environmental sustainability goes beyond the scope of this study.
3. Economic sustainability dimension for banking industry
Economic sustainability in the banking sector pertains to the ability
of a business to maintain robust earnings and ensure the successful
continuation of business activities throughout the business cycle.
Economic sustainability addresses micro, macro, and industry-specific
factors. To achieve robust economic sustainability, it is essential to address
the following questions.
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Therefore, the question arises: Can Shariah financial industries play a
role in improving the economic well-being of the Indonesian population and
contribute to the implementation of the Shariaeconomic system in Indonesia?
Hence, it is crucial to examine the roles and mechanisms of Shariah financial
industries in Indonesia. The purpose of this scholarly article is to provide
understanding and educational contributions to readers regarding the roles
and mechanisms of Shariah finance in Indonesia.
One of the reasons for the emergence of the Shariafinance industry is
to implement an economic system based on the principles of the Quran,
Hadith, Ijma', and Qiyas Ulama'. In its implementation, the Shariafinance
industry is not significantly different from the conventional finance industry
in general. However, in the Shariafinance industry, procedures must align
with the Shariah concept in Islam. This Shariah concept involves efforts to
avoid prohibitions found in muamalah, such as gharar (uncertainty), iḥtikar
(market manipulation), riba (usury), tadlis (deception), risywah (bribery),
maysir (gambling), and other prohibitions through methods like Mudarabah
Financing, Musharakah Financing, Ijarah Financing, Wakalah, Mudarabah
Musharakah Contracts, and Kafalah Contracts, as recognized by the National
Shariah Board of the Indonesian Ulema Council and supervised by the
Financial Services Authority (OJK).
B. Types Of Sharia Finance Industry

The Sharia finance industry can be divided into two categories, namely
banking and non-banking. The following are various types of Shariafinance
industries present in Indonesia: 1) Banking Industry
Islamic Banking
The management of Islamic banks is actually not much different from
the management in conventional banking. Islamic banking embraces the
application concept that aligns with Shariah principles, such as the
elimination of riba or interest, as in Islam, buying and selling are allowed while
riba is prohibited. Islamic banks implement a profit-sharing concept and
share losses between the two parties. If a customer incurs a loss, the bank will
share the loss according to the agreed-upon contract. In contrast, in
conventional banking, interest continues to accumulate over time or the
duration of a customer's loan. Even in the case of a loss, customers are still
required to pay the predetermined interest.

So, Islamic banking serves as a financial institution that gathers funds
from customers and channels them back to the community in need of
financing, utilizing Shariah contracts that involve profit and loss-sharing
systems, as well as a profit-sharing system bound by Shariah principles. In
Islamic banking, transactions are free from riba, gharar, and maysir
(Yanti,2020: 85). The roles of Islamic banking encompass several aspects,
including:
1. Participating in enhancing the economy through empowering SMES.
2. Increasing awareness among Muslims in Indonesia about Shariah
principles, potentially expanding the segment and market share for Islamic
banks.
3. Contributing to the implementation of non-riba transactions and adhering
to other prohibitions in muamalah (Ritonga, 2021b: 242).
4. Attracting foreign investors or foreign investment.
5. Functioning as a gatherer and distributor of funds from the public.
Islamic banking has two types of products, namely funding and
landing. Funding involves collecting funds from the public, while landing
involves distributing funds to the community. Funds gathered through
funding products will be managed or channeled into landing products to
provide financing to customers in need.Funding products include Giro
Wadiah, Giro Muḍarabah, Tabungan Wadiah, Tabungan Muḍarabah, and
Deposito Muḍarabah. Landing products encompass profit-sharing financing
using Muḍarabah or Musyarakah contracts, as well as non-profit-sharing
financing using Murabahah, Salam, Istishna, Ijarah, and Qarḍ contracts.
Shariah Rural Credit Bank (BPRS)

Shariah Rural Credit Bank , abbreviated as BPRS, is a Sharia financial
institution in the form of a bank that is part of the Sharia banking sector. In
its operations, BPRS is based on the principles of Islamic Sharia.The main
purpose of the existence of Shariah Rural Credit Bank is to support and assist
economic activities of the weak economic communities, both in rural and
urban areas, with a primary focus on financing Micro, Small, and Medium
Enterprises (SMEs). Unlike Islamic Banking, BPRS is prohibited from
conducting transactions using foreign currencies; BPRS is only allowed to use
the Indonesian rupiah (thus, its scope is only national or domestic).BPRS plays
a crucial role in providing capital to people who want to establish or develop
existing businesses. BPRS also contributes to the development of community-
owned SMEs by providing training for national competitiveness and offering
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guidance through activities such as participating in community businesses in
exhibitions and providing consultations on business development
(Nur‘aisyah, 2020b: 122).
The products offered by BPRS are not significantly different from
Islamic Banking, including: First, Fund Collection Products with several
products such as Amanah Savings, Wadiah Savings, and Wadiah/Mudarabah
Deposits. Second, Fund Disbursement Products with several products,
including Mudarabah Financing, Musyarakah Financing, Murabahah
Financing, Qardul Hasan Financing (where customers only need to repay the
principal received without additional returns as per the agreed agreement
within an agreed-upon period, allowing customers to manage the funds
according to their needs) (Syarofi, 2021b: 64), Istisna' Financing (where the
bank provides goods needed by customers according to specified criteria, sold
to customers at a pre-agreed price, and payment is adjusted based on the
customer's ability and agreement from the start, which can be paid in
installments or settled directly) (Mardotillah, 2021b: 151), and Hiwalah
Financing.
Non-Bank Sharia Financial Industry

a. Sharia Financial Services Cooperative or Baitul Maal Wat Tamwil
Baitul Maal Wat-Tamwil, better known as BMT, is a microfinance
institution with operational principles based on Sharia concepts in Islam.
The functioning of BMT is almost identical to Islamic banking, both
serving as institutions to collect funds from the public and act as channels
for fund distribution within the community. However, BMT also serves
another purpose as a distributor for the utilization of worship assets in the
form of charity, alms, endowments, and voluntary contributions.As its
name suggests, Baitul Maal Wat Tamwil consists of two words: Baitul Maal,
which focuses more on non-profit fund distribution and accumulation
activities, such as zakat, alms, endowments, charity, and fidyah.
Meanwhile, Baitul Tamwil focuses more on the collection and distribution
of funds with profits using products based on Sharia contracts (Melina,
2020b: 271).
BMT plays a role in creating job opportunities, steering the
community away from economic practices that deviate from Islamic
principles through its financing products, serving as a capital provider for
those in need (Sudjana, 2020b), and breaking dependence on loan sharks.

b. Sharia Pawnshop
Sharia Pawnshop, or Pegadaian Syariah, is a financial industry that
provides loans to the public with the condition of collateral in the form of
movable goods with commercial value. Not all items can be pawned in
Sharia Pawnshops; eligible items must be movable and have commercial
value, such as jewelry, electronic devices, vehicles, household goods,
machinery, and valuable securities (stocks, bonds, etc.) (Yuniwati,
2021b:196).
Sharia Pawnshop serves as a capital provider for the community,
especially small traders, to meet short-term economic needs without
burdening borrowers, providing an alternative for SMEs to develop their
businesses.
c. Sharia Insurance
In conventional insurance, customers purchase protection from an
insurance company with the aim of being compensated for unforeseen
events such as losses, theft, someone's death, and others. This is in contrast
to the concept of Sharia insurance in Islam. Sharia insurance is an
agreement made by two or more customers who mutually bind themselves
in a specific community with the aim of helping each other bear risks. It is
defined more as a collaborative effort among fellow human beings. The
premiums paid to the insurance company remain the property of each
customer; however, these premiums are entrusted to the Sharia insurance
company for management. This differs from conventional insurance,
where the premiums paid by customers automatically become the property
of the insurance company handling them.
However, Sharia insurance is not only intended for the Muslim
community; non-Muslims can also use Sharia insurance because,
fundamentally, Sharia insurance is born from the concept of mutual
assistance among fellow human beings to benefit the entire universe. This
is evident with the existence of products in Sharia insurance that are also
offered by conventional insurance (Mu’awanah, 2021a: 70). Its role is to
minimize significant losses caused by unforeseen events in the future,
serving as a fund-raising medium through premiums entrusted by
members, which will then be managed by the company for investment or
to assist other members facing adversity.
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d. Sharia Capital Market
The Sharia Capital Market is where investors and issuers meet to
trade securities such as Sharia-compliant stocks, Sharia bonds, or sukuk,
etc., issued by the government or companies, ensuring adherence to
Islamic principles in their implementation. The role of the Sharia capital
market in the economy includes:
1) Acting as a source of capital for issuers in need of funds to develop their
companies.
2) Serving as an investment or long-term savings medium for investors
that can generate profits.
3) Funding or supplementing funds for realizing government projects
through instruments within it (Yusuf, 2021a: 401).
The instruments traded in the Sharia capital market are as follows:
1. Sharia Stocks. Sharia stocks represent ownership of assets in a company,
and shareholders (investors) will receive profits from the company,
aligning with Sharia concepts in their implementation (Boangmanalu,
2021b: 82).
2. Sharia Bonds. Sharia bonds are, in essence, long-term debt instruments
issued by issuers in need of capital.
3. Sukuk; While sukuk and Sharia bonds are different instruments, most
people consider them the same. Sukuk is proof of ownership or certificates
held by investors, also known as long-term securities issued by issuers, with
the obligation to pay profits from their company to investors based on a
profit-sharing/fee system in accordance with Sharia principles (Fauziyah,
2020b: 75).
4. Sharia Mutual Funds. Sharia Mutual Funds function as an alternative for
people, especially those lacking knowledge about investments, with small
capital, or without the time to manage their investments. Sharia Mutual
Funds serve as a medium for collecting funds or capital from the public as
investors to be channeled to issuers or companies (a medium for fund or
capital distribution).
e. Sharia Financing Companies
These companies function as providers of funds or loans to the
public or business entities, with their main focus solely on financing for the
procurement of services or goods based on Sharia principles as determined
by the National Sharia Board of the Indonesian Ulema Council (DSN MUI)
(Diani, 2020: 20). In their activities, these companies focus solely on

collecting funds from the public and are prohibited from withdrawing
funds from the public, unlike Sharia banks that offer Savings, Current, or
Deposit accounts.
Types of Financing in Sharia Financing Companies include Sales
and Purchase Financing, Investment Financing, and Service Financing.
1) Sales and Purchase Financing
Sales and Purchase Financing is a type of financing in which the
company provides goods through a sale and purchase transaction, using
Murabahah, Salam, or Istiṡna’ contracts according to the agreed-upon
terms.
2) Investment Financing
Investment Financing is a type of financing where, in its
application, the company provides funds or capital needed by the public.
The profits from the business are then shared according to the agreement
made at the beginning. Investment Financing can use various contracts
such as Mudarabah, Musyarakah, Musyarakah Mudarabah, and
Musyarakah Mutanaqishah.
3) Service Financing
Service Financing is a type of financing where the company
provides services in the form of providing benefits of a commodity,
granting loans, or providing services without remuneration. Service
Financing utilizes 7 contracts, namely Ijarah, Ijarah Muntahiyah Bittamlik,
Hawalah or Hawalah Bil Ujrah, Kafalah or Kafalah Bil Ujrah, Sale, and
Qard.
C. The Existence of the Sharia Financial Industry as an Actor in

the Economic Wheel in Indonesia
The presence of the Sharia financial industry is highly beneficial to
society, considering its primary role as an intermediary between those with
excess funds and those in need of funds. This role contributes to the
implementation of the Islamic economic system in Indonesia, freeing the
community from dependence on loan sharks to meet its economic needs and
serving as an investment platform for the public.The industry is expected to
become one of Indonesia's pillars of strength in the development of the
national economy. The Sharia Financial Industry that has developed in
Indonesia includes Islamic Banking, Islamic Credit Banks, Sharia Financial
Service Cooperatives, Sharia Pawnshops, Sharia Insurance, Sharia Capital
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Markets, and Sharia Financing Companies. Their presence supports the
national economic linkage.
Conceptually and mechanistically, the Sharia financial industry is well-
suited to the demands of the times and deserves to grow as a Sharia financial
system, not just as an alternative (second choice), especially for the Muslim
community in Indonesia. The existence of Sharia Financial Institutions in
Indonesia reflects the achievement of a country in running an economic
system in line with Sharia concepts.
This is advantageous for the Indonesian Muslim community, as many
Muslims are reluctant to invest or borrow from conventional institutions due
to the consideration of the prohibition of usury (riba) within them. One of the
motivations behind the existence of the Sharia financial industry is to
implement an economic system based on the Quran, Hadith, Ijma', and Qiyas
of the Ulama. In its application, the Sharia financial industry is not far from
conventional financial industries in general, but the procedures in the Sharia
financial industry must adhere to Sharia concepts in Islam, which prohibits
usury and other market manipulations.

Chapter 2
HALAL FOOD AND BEVERAGE
INDUSTRY
Aryanti, S.E., M.M, Mitra Amelia
A. Development of Halal Food and Beverage Industry

The halal food and beverage industry is an industrial activity that
starts from the acquisition of raw materials, processing to the production of
halal products, where means and methods permitted by Islamic law must be
used. Currently, the halal industry has become the focus of attention in
Indonesia and has become the direction of its development. In fact, Indonesia
is the country with the largest Muslim population in the world (Baharuddin
and Ab Rahman, 2021) (Wibawa et al. , 2023) . Indonesian Muslims make up
86.7% of the total population of Indonesia. According to The Muslim 500 2023
edition of the Royal Islamic Strategic Studies Center (RISSC) report, the
number of Muslims in Indonesia increased to 237.55 million last year. This
number is the highest in the countries of the Association of Southeast Asian
Nations (ASEAN) and in the world. (Annur, 2023) .
This can be seen from the fact that the number of owners of halal
certificates for food products, beverages, hotels, spas and other aspects is
increasing. The halal food industry is also becoming more concerned and
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sensitive about the manufacture and procurement of halal products, as well
as receiving recognition as a measure of food safety and quality assurance.
Halal products themselves are products that have been declared halal in
accordance with Islamic law. The halal food and beverage industry is an
important part of the world economy, especially in Indonesia. Currently, the
halal industry has become the center of attention in Indonesia and has
become a trend in its development. As it develops, the halal industry does not
only cover food and beverages, but extends to lifestyles such as the tourism,
cosmetics, education, finance, fashion, recreational media, and arts and
culture sectors. The opportunity for the halal industry is very large because
the increasing number of Muslim population requires every adherent to fulfill
their needs from halal sources and does not violate Islamic law. The Global
Islamic Economy Report by Thomson Reuters in collaboration with Dinar
Standard notes that globally, Muslims spend 1.2 trillion US dollars on food and
drink. Seeing such rapid development and great opportunities, many
countries are starting to focus on developing the halal industry to reach world
markets. In this context, halal food refers to products produced from halal
animals, with processing methods that achieve a high level of hygiene and
quality. This industry is growing rapidly and has become an important
industry in various countries, including Indonesia. The level of sustainability
and fairness of halal food in the world has increased over time, with
consumers increasingly appreciating halal products.
According to Dinar Standard, consumption of halal products in
Indonesia will grow to $282 billion in 2025, an increase of 53% from $184 billion
in 2020. The halal food and beverage sector accounts for the majority of this
consumption, and consumption increased by 135 billion USD in this sector in
2020, making Indonesia the largest consumer of halal food and beverages in
the world. Spending in this sector is projected to increase to $204 billion by
2025
Picture 1. Indonesian Halal Product Consumption Value per
Sector (2020&amp:2025)

This is a motivation for the halal food and beverage industry to
continue to develop products that comply with halal requirements and
maintain high quality. The halal food and beverage industry in Indonesia is
experiencing significant development. Several halal food companies in
Indonesia are successful in producing high quality and satisfying products, as
shown by the Ministry of Industry. Apart from that, the halal food and
beverage industry in Indonesia is growing rapidly and has become one of the
mining sectors that attracts investment, both domestic and foreign.
B. Understanding Halal in the Food and Beverage Industry

In the food and beverage industry, the concept of halal
delineates the Islamic religious principles permitting products for
consumption by Muslims. This principle transcends the confines of Muslim
recognition; it has emerged as a global standard, serving as an alternative
yardstick for ensuring the safety, cleanliness, and quality of daily consumables
(Amini et al. , 2022). Halal products embody a symbol of safety, cleanliness,
and superior quality specifically tailored for the Muslim community. Halal
certificates act as unequivocal assurances, affirming a product's adherence to
halal standards (Saputra and Satria, 2021). The halal food industry is
increasingly required to be competitive, and fourth level technology provides
comfort and convenience for producers and consumers in using elastic
machines. Muslim consumers have a positive perception of food products that
use a halal approach because the Islamic religion really pays attention to its
adherents consuming good and halal food. Halal food in Indonesia is food that
has been given a halal certificate by the MUI to companies that submit a halal
test to the MUI.
In Indonesia, the definition of halal food extends to products endorsed
with a halal certificate issued by the MUI, following rigorous halal testing
conducted by the companies seeking certification. These halal certificates,
authorized by the MUI, remain valid until their expiration. Collaborative
efforts between BPJPH and MUI, encompassing the certification of sharia
auditors, determination of product halalness, and the accreditation of halal
inspection institutions, stand as integral facets in the continuous
development of the burgeoning halal industry (Bakar, Pratami and Sukma,
2021).
Moreover, the significance of halal products as epitomes of safety,
cleanliness, and premium quality for the Muslim demographic is reiterated
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through the issuance of halal certificates, ensuring the product's conformity
to halal standards (S, 2020). As the halal food industry advances and
technology progresses, the incorporation of fourth-level technology further
amplifies convenience and efficacy for both producers and consumers,
embracing adaptable machinery. This profound regard for halal consumption
within the Islamic faith continues to underpin the positive reception of
halalcentric food products among adherents, emphasizing the consumption
of ethical and halal food items (Saputra, Satria and Muharir, 2021).
C. Halal Regulations and Certification

Certainly, here's an elaboration on the importance of regulations and
certification in the context of halal food and beverages in Indonesia. The
regulation and certification processes concerning halal food and beverages
hold paramount significance, especially for Muslim consumers in Indonesia,
the country boasting the largest Muslim population globally. The responsible
body for halal certification is the Halal Product Guarantee Organizing Agency
(BPJPH), an independent governmental body functioning under the Ministry
of Religion of the Republic of Indonesia (Faridah, 2019). Halal certification for
food and beverage products provides legal certainty to Muslim consumers
that the product is truly halal in accordance with Islamic law (Syafrida, 2017).
The regulatory framework governing halal certification in Indonesia
encompasses a multitude of laws and regulations, each designed to reinforce
and ensure compliance with halal standards. Among these, Law No. 33 of 2014
on Halal product guarantees and Minister of Religion Regulation no. 20 of
2021 on Halal certification for micro and small businesses are notable
(Kasanah and Sajjad, 2022).
Halal food and beverage certification regulations in Indonesia consist
of several regulations and laws. The following are several regulations
governing halal certification in Indonesia:
1. Halal Product Guarantee (JPH) Act No. 33 of 2014: requires halal
certification for food and beverages.
2. Minister of Religion Regulation No. 20 of 2021 concerning Halal
Certification for Micro and Small Business Actors. Requires free halal
certification for micro and small business actors who meet the criteria.
3. Government Regulation (PP) No. 31 of 2019 on the implementation of JPH,
It is noted that the obligation to have a halal certificate for product types
is implemented in stages.

The significance of these regulations and certification processes goes
beyond religious compliance. They function as crucial mechanisms instilling
confidence among consumers regarding the adherence of products to halal
principles. This confidence, stemming from regulatory clarity and credible
certification, profoundly impacts the economic landscape by facilitating
market access, particularly in markets where the demand for halal products is
high.
Furthermore, these clear regulations and credible certifications not
only bolster consumer trust in halal products but also significantly enhance
the competitiveness and stature of the food and beverage industry. By meeting
the burgeoning market demands for halal products, the industry gains an
edge, fostering its reputation and standing within a market increasingly
inclined towards halal offerings. Hence, the robust framework of regulations
and the rigorous certification process for halal products not only cater to
religious considerations but also bear substantial economic implications,
propelling the industry's growth and ensuring consumer confidence in the
marketplace.
D.Challenges in Producing Halal Food and Bavarage Industry

The halal food and beverage industry in Indonesia faces several
challenges that need to be overcome to advance the industry. The halal food
and beverage industry in Indonesia faces several challenges, including:
1. Dependence on imports: The halal food and beverage industry in Indonesia
still depends on imports, where as much as 71 percent of Indonesia's total
imports are raw materials and intermediate goods or supporting
processing industries, including food and beverage processing.
2. Understanding the halal value chain: Human resources in Indonesia
still lack understanding in the halal food and beverage industry, including
a lack of understanding of the halal value chain in the food and beverage
production system (Baharuddin and Ab Rahman, 2021).
3. Sector development: The development of the halal food and beverage
industry in Indonesia still has challenges because this sector has not yet
reached its maximum potential.
4. Opportunities and challenges for halal products: Indonesia has great
opportunities as a halal food consuming country, but also faces challenges
in maintaining the quality of halal products and overcoming dependence
on imports (Yunita, 2018) .
| 15
5. Financing that is appropriate and targeted: Indonesia needs to ensure that
financing will be more appropriate and targeted to support strengthening
food security, especially in the food and beverage sector.
6. Technological development: To increase the guarantee of halal products in
Indonesia, increased technological development is needed (Saputra, Satria
and Muharir, 2021) .
7. Logistics and supply chain: The importance of the thayyib aspect in the
halal food industry can actually be an explanation and can expand the
scope of halal guarantee itself (Saputra, Satria and Muharir, 2021).
The challenges faced by food and beverage manufacturers within the
halal industry serve as focal points, compelling them to ensure strict
compliance with halal standards in their product offerings. Addressing these
challenges stands as a pivotal endeavor in augmenting the quality and
accessibility of halal products within the market. To surmount these hurdles,
Indonesia must dedicate attention to multifaceted aspects, encompassing a
comprehensive understanding of the halal value chain, technological
advancements, as well as enhancements in financing and logistics.
Understanding the intricate nuances of the halal value chain
forms the cornerstone of navigating these challenges. This involves an in-
depth comprehension of each stage, from sourcing raw materials to
production, processing, packaging, and distribution, ensuring every step
aligns with stringent halal requirements. Manufacturers must adopt measures
to certify and monitor every phase, thereby assuring consumers of the
product's halal integrity.
The integration of technology plays a pivotal role in streamlining
processes and enhancing compliance within the halal industry. Innovations in
production technologies, such as sophisticated tracking systems, blockchain,
and traceability mechanisms, can significantly fortify the assurance of halal
compliance throughout the supply chain. Embracing these technological
advancements enables real-time monitoring, verification, and documentation
of halal practices, fostering consumer confidence.
Furthermore, access to adequate financing and logistical support
remains imperative for the sustained growth of the halal industry.
Investments geared towards research and development, infrastructure, and
capacity building are essential to drive innovation, improve standards, and
scale up production. Enhanced logistics infrastructure facilitates the efficient

movement of halal products, ensuring timely delivery without compromising
on quality or compliance.
The collaborative efforts of the government and associated
stakeholders are indispensable in propelling the development of Indonesia's
halal food and beverage industry. Coordination among regulatory bodies,
industry players, research institutions, and financial entities is crucial in
formulating and executing comprehensive strategies. These efforts should
encompass regulatory frameworks, capacity building initiatives, market
development programs, and promotional campaigns to amplify the industry's
growth trajectory.
In essence, overcoming the challenges prevalent in the halal industry
demands a holistic approach. Indonesia's commitment to understanding the
halal value chain, leveraging technological advancements, ensuring financial
support, bolstering logistics, and fostering collaborative efforts among
stakeholders is pivotal. Such concerted efforts are essential in not only
addressing current challenges but also in fortifying the quality, availability,
and competitiveness of halal products within the market, contributing
significantly to the industry's sustainable growth.
E. The Importance of the Halal Food and Beverage Industry in

the Economic and Health Context
The pivotal role played by the halal food and beverage industry in
economic resurgence, particularly in nations boasting substantial Muslim
populations like Indonesia, cannot be overstated. Post-pandemic economic
recovery policies of various countries underscore the significance of the Sharia
economy. This resurgence is fueled by several key drivers, including the sheer
size of the Muslim populace, an amplified consciousness regarding Islamic
ethical principles governing the consumption of halal goods, and the
proliferation of national strategies and initiatives aimed at fostering the
development of halal products and services.
The burgeoning Sharia economy manifests encouraging growth
trends. Notably, Bank Indonesia highlights the potential contribution of the
Sharia economy to the nation's GDP, projecting a substantial $5.1 billion influx
through the export of halal commodities, augmented foreign investments,
and the practice of import substitution.
| 17
Indonesia, in recent years, has witnessed an exponential expansion of
its halal industry, firmly establishing itself as the world's largest market for
halal consumer goods, commanding a significant 11.34% share of the global
expenditure on halal products. The government of Indonesia, recognizing this
burgeoning market potential, has embarked on multifaceted strategies to
harness the latent power of the halal industry. One such strategy involves
robustly promoting and nurturing the halal sector.
Halal food and beverages, besides being perceived as aligned with
healthier options, perfectly cater to the escalating demands of a growing
market segment. Within the realm of health, there persists a notable dearth
in students' comprehension of halal consumables, underscoring the pivotal
importance of familiarizing them with the concept of halal food and drinks
from an early age. This early exposure assumes significance as an integral
component of health education. Thus, fostering an understanding of halal
food and beverages in the context of health holds potential in contributing to
economic revival. It aids in augmenting consumer awareness regarding the
importance of opting for healthy and superior quality halal products.
Therefore, instilling an understanding of the health implications related to
halal consumables can serve as a catalyst in stimulating economic recovery by
enhancing consumer consciousness about healthy and high-quality halal
products.
F. Latest Innovations and Developments in the Halal Food and

Beverage Industry
The latest innovations and developments in the halal food and
beverage industry are important to meet consumer awareness and demand,
as well as to develop a global market that values products and services that
comply with halal principles. Following are some of the strategies and
initiatives that have been adopted in the halal industry:
a) Product Innovation: The halal industry can encourage innovation in the
development of new products that comply with halal principles, including
food products, beverages, cosmetics, pharmaceuticals and other services
that comply with Islamic values.
b) Infrastructure and Technology Development: Investments in production
facilities, supply chains, and information technology can help increase the
efficiency and competitiveness of the halal industry.

c) Human Resource Training and Development: Developing good human
resource skills and competencies in the halal industry is very important to
increase productivity and competitiveness.
d) Coordination and Collaboration: Encouraging cooperation and
collaboration between stakeholders, such as technology users, users and
technology providers, both nationally and globally
e) Marketing and Promotion: Promoting research and innovation products to
technology users, both industrial players/MSMEs, the community and
other parties, so that there will be an increase in utilization and
cooperation in the halal industrial sector.
f) Development of Quality and Halal Standards: Ensure that output products
meet quality criteria and halal standards, so that they are suitable for
consumption by Muslims.
In recent times, the halal industry in Indonesia has experienced a
remarkable surge, solidifying its influential stature globally, particularly in
nations witnessing a burgeoning Muslim populace. This exponential growth
trajectory owes much to the unwavering commitment showcased by the
Indonesian government and key research bodies, such as the National
Research and Innovation Agency (BRIN) and the National Committee for
Sharia Economics and Finance (KNEKS). Their steadfast dedication has been
pivotal in propelling the development and fostering innovation within the
realm of halal products, aligning with Indonesia's ambitious vision of
attaining the status of the World Halal Producer Center by 2024.
The proactive involvement and strategic initiatives orchestrated by the
government, in tandem with dedicated research bodies, have catalyzed
groundbreaking advancements within Indonesia's halal industry. These
concerted efforts have laid the groundwork for groundbreaking research,
innovative approaches, and the formulation of strategic frameworks aimed at
elevating the quality, diversity, and accessibility of halal products on a global
scale.
The National Research and Innovation Agency (BRIN) stands
as a cornerstone in spearheading research initiatives geared towards
advancing the halal industry. Their pivotal role encompasses the facilitation
of cuttingedge research endeavors, technological innovation, and the
promotion of sustainable practices within the halal sector. BRIN's concerted
efforts have led to breakthroughs in research and development, fostering the
| 19
creation of innovative solutions that align with halal principles, catering to
the evolving needs of consumers worldwide.
Simultaneously, the National Committee for Sharia Economics and
Finance (KNEKS) has played a pivotal role in steering the trajectory of
Indonesia's halal industry. Through strategic planning, policy formulation,
and collaborative engagements with various stakeholders, KNEKS has been
instrumental in shaping the direction of the halal economy. Their efforts
extend beyond mere regulation, emphasizing the cultivation of an ecosystem
conducive to innovation, entrepreneurship, and market competitiveness
within the halal sector.
The combined dedication of these governmental and research entities
has not only propelled Indonesia's halal industry onto the global stage but also
set the pace for sustainable growth and innovation. Their collective vision and
unwavering commitment signify Indonesia's ambition to be at the forefront
of halal industry development, fostering a legacy of excellence and leadership
in the production and dissemination of high-quality halal products globally
by 2024.
This concerted push towards innovation, propelled by governmental
support and the robust efforts of research bodies, underscores Indonesia's
determination to set new benchmarks and standards in the halal industry,
cementing its position as a global leader and trailblazer in the domain of halal
production and innovation.

Chapter 3
HALAL FASHION INDUSTRY
Fernando Africano, S.E.I., M.Si, Popi Marsela
A. Definition of Halal
The word halal ( ‫ )حالل‬comes from Arabic, namely ha-la-la, which is the
mashdar form of the words halla, yahullu, hillan, wa halalan, wa Hululan. The
various forms of the word halal have various meanings, including: leaving an
activity, stopping stopping or staying in a place, releasing ties, freeing
someone from the breaking of an oath, and so on. By etymology , the word
halal contains meaning liberate, release, resolve, dissolve And allow . In the
Munjid halal means release bond . Noun halal ( ‫ )حالل‬is The opposite of the
word haram ( ‫)حرام‬. (Nizar 2019a, hal. 9)
In the Big Indonesian Dictionary, halal means permitted (not
prohibited by sharia), which is obtained or done legally, permission. In the
Encyclopedia of Islamic Law it is said that the meaning of halal has three
meanings, namely:
1. Halal is something that causes someone not to be punished if they use it.
2. Halal is something that causes someone not to be punished if they do it,
because it is justified by the Sharia."
3. Halal has the same meaning as permissible, permissible or jaiz . (Nizar
2019b, hal. 9)
| 21
According to (SARI 2014)halal has the original meaning of al-ḥalli
which means later ties becomes "letting go of ties". a mentioned in the Word
of Allah SWT. (Q.S Ṭaha: 27).
َ ‫ع ْقدَةْ ِّمن ِّل‬
‫سا ِّنى‬ ْْ ُ‫َوٱحْ ل‬
ُ ‫ل‬
And remove the atiffneaa from my tongue (Q.S. Ṭaha: 27).
From this meaning, the ability to use something is unlimited on
objects or anything needed for physical purposes, including food, drinks or
others. Or ability utilize, eat, drink and use even do something all of them
determined based on nas. Al - Syaukani said halal is letting go (iḥlal) bond of
danger from him (Nizar 2019b, 12).
B. Definition Halal Industry

The halal industry describes an industry that must comply with laws
and regulations according to sharia. The implementation of halal business and
trade broadcasts a new paradigm that maximum profit is not the main goal,
but remains in line with the goals of the Islamic religion, namely Maqasid Al-
Shariah. The halal industry is the main focus in developing the sharia
economy in Indonesia. In its development, the halal industry is not only in the
financial sector, but also in the real sector, such as halal food and drinks,
fashion Muslims, halal tourism, halal recreational media, halal
pharmaceuticals and cosmetics, and also renewable energy. This sector is a
very competitive sector for national economic growth.
The terms industry and halal form the halal industry in language.
Industry is defined as the activity of managing or processing something by
utilizing facilities and equipment, such as machines. Halal, on the other hand
, refers to everything that is in accordance with Islamic religious law.
Therefore, the halal industry can be seen as an effort to provide goods or
services that follow sharia standards in terms of implementation and
resources used. Halal economy can also be considered as halal industry. (Kadir
2023)
Indonesia is a country that has the largest Muslim population,
reaching 87.18 %. This is both an opportunity and a challenge for the halal
industry. Most of the current conditions of the halal industry are still
supported by imported products, which means the community Indonesia is
still largely a consumer of halal products, not a producer. so it can be said that
it has not been able to play an optimal role in meeting demand. Various efforts

have been made by the government, such as the publication UU no. 33 of 2014
concerning Halal Product Guarantees.
C. Challenges for the halal industry in Indonesia

Graph 1.1: Top 15 Global Islamic Economic Countries Ranking 2019
Source: kompasiana.com/2023
1. Indonesia's halal potential has not been optimized because Indonesia is

currently ranked first in terms of consumers of halal food products,
namely US$169.7 billion, however Indonesia is only ranked 10th in halal
food production. This could have the potential to develop the halal
industry in Indonesia. However, this potential cannot be utilized
optimally.
2. There are internal and external obstacles
The internal challenges faced include the lack of business actors who
carry out halal certification for their business entities and products. In
fact, Indonesia is a Muslim-majority country, business actors should pay
attention to halal standards in their business entities and products. Not
only that, halal certification bodies are still considered less than optimal
because of the assumptions that every product produced in Indonesia is
generally halal and therefore does not require halal certification for that
product.
The external challenge faced is Indonesia's competition with other
countries such as Malaysia and Brunei Darussalam. Currently, the halal
industry in the food and beverage and financial sectors is very large.
Countries are currently taking advantage of this, one of which is
Malaysia. Malaysia is quite serious about taking advantage of this, and it
has been proven that they are still the number 1 producer of halal food in
the world.
| 23
Opportunities for the halal industry in Indonesia:
1. The Muslim population is large and its numbers will increase.
2. It's a big business
3. The halal industry is of interest to various countries
4. The types of halal industries that can be developed vary
D.Development of the Halal Industry in Indonesia

Figure 1.1: Global Halal Industry Development 2021
Source: Ilmu.lpkn.id/2023
The development of the sharia economy has shown positive

indications in the last two decades, both globally and nationally. Based on
data from The State of the Global Islamic Economy Report 2019/2020, the level
of spending on halal food and lifestyle among Muslims globally reached USD
2.2 trillion in 2018, and is predicted to continue to grow to reach USD 3.2
trillion in in 2024.
Where the cumulative annual growth was 6.2 percent, apart from that,
Islamic financial assets were reported to have reached USD 2.5 trillion in 2018.
This was also caused by the increase in the number of Muslim population in
the world, which in 2017 reached 1.84 billion people. This number will
continue to increase and reach 27.5% of the world's total population in 2030.
This increase in population significantly influences demand for halal products
and services.
The development of Islamic fashion is increasingly developing
positively, marked by the emergence of new brands, Muslim fashion shows
being held throughout the world. Another fact, namely the transaction carried

out by Modanisa by selling minority shares estimated at USD 15 million to
Goldman Sachs and Wamda Capital to fund expansion, similar things were
also carried out by several companies such as The Modist from Dubai and New
York Haute Hijab. Based on data from The State of the Global Islamic
Economy Report 2019/2020, it is explained that the expenditure value
allocated by Muslim consumers for clothing and footwear is estimated at USD
383 billion in 2018 and is projected to grow to USD 402 billion in 2024.
Indonesia is the country with the largest Muslim population in the
world, 87.2% of Indonesia's 268 million population, which is 13% of the world's
entire Muslim population, so the need for Indonesian halal products is very
large. Indonesia has not been able to play an optimal role in meeting several
demands from several existing sub-sectors. In the Global Islamic Economy
Index 2019/2020, which measures the strength of the sharia economy in 73
countries, Indonesia was ranked 5th in 2019/2020, this position has increased
compared to the previous year which was only ranked 10th.
The performance of Halal Product Exports from Indonesia to OIC
countries was 10.7%, occupying third place and Indonesia's exports to the
global market were only 3.8% or equivalent to USD 7.6 billion. The
development of the halal industry in Indonesia in particular can be seen
through Indonesia's position in several halal sub-sectors globally. Of the 6
sectors assessed, the Halal food, Media & Recreation , and Pharma &
Cosmetics aspects are 3 sectors that need to be developed to balance the
performance of other sectors.
E. Halal Fashion
In the last few decades the need for religion has continued to increase,
especially for people who live in urban areas. The need for religion is not only
in the spiritual dimension, but also in the physical dimension of need. This
means that the need for religion is not only a form of conditioning in
responding to individual problematic problems, but must be highlighted
through physical things such as goods or the food they consume, including
clothing (fashion) that must be in accordance with religious demands.
Dressing according to the Shari'a has now become a trend as a symbol of piety
towards religion, especially Islam. (Zaki, R. M., Kheir El Din, A., & Elseidi 2023)
To a greater or lesser extent in Islam, clothing is regulated by sharia
provisions. Islamic clothing regulations are explained explicitly, such as long-
sleeved, loose clothing and covering the private parts. (Ashraf, S., Williams, A.
| 25
M., & Bray 2023, hal. 14)However, the need for fashion is transforming Muslim
clothing as a commodity that needs to be fulfilled. The profession of Islamic
material Islamic clothing and urbanrelated Islamic material culture is the
result of the cultural, economic and political intersection of the urban middle
classes.
In this context clothing needs to be understood as debate and
modernity. The debate in question is a debate that is not exclusive, but rather
stimulates forms of commodified religious performance. In Indonesia, the
commodification of clothing in Indonesian cities has not been a
straightforward process, but has been and remains an arena for Indonesian
Muslims, men and women, to think about the relationship between religion,
gender and economics. (Jones 2007)
The development of Muslim fashion in Indonesia is also accompanied
by a very high level of consumption, especially in fashion. It is recorded in the
data that the level of fashion shopping on trading platforms reached 58%,
followed by gadget products and beauty products, which contributed at least
47% and 43% respectively. Meanwhile, the level of Muslim fashion
consumption in Indonesia reached 286.9% with a growth rate of 18.2% per
year. This potential is a driving force for creative and fashion industry players
in Indonesia to spread their wings. Indonesia's goal in the coming year is to
become the mecca of world Muslim fashion.
With the potential that Indonesia has, it is possible to fulfill the goals
that have been hoped for. of course accompanied by increasing consumption,
the development of individualism, materialism which forms the background
for these practices to be carried out (Ashraf, S., Williams, AM, & Bray 2023). It
is on the basis of this entanglement in Islam that the transregional push for
consumer goods will continue growing and aimed at a new Muslim fashion
economy that can be developed. So the question asked is first, how is Muslim
fashion contextualized with locality? Second, how is the transregional
connectivity of Muslim fashion emerging in the current dynamics? To be able
to explain this, it is necessary to then map the areas and perceptions that are
developing in society.
The Arabian peninsula such as Saudi Arabia and the Arab region are
called the heart of the Muslim world. with this understanding, southeast Asia
is considered to be on the fringes of Islam. where spiritualism has a profound
effect on the process of making meaning related to objects originating from
these regions. This means that meaning making if identified with the Arabian

peninsula is considered a religious observance including dress codes. The
important thing then in this context is how to adopt and change elements of
Islamic style in the Arabian peninsula without ignoring locality. especially for
women's clothing in their lives. thus being able to build their own markets
and cultural practices in a transregional dimension between West Asia and
Southeast Asia.
Halal fashion is a way of dressing that is in accordance with the
recommendations of the Islamic religion which refers to clothing products,
accessories and lifestyles that comply with Islamic sharia principles .
The Muslim fashion industry is one of the driving sectors for sharia
economic growth. The fashion industry's contribution to the economy from
2014-2016 was relatively stable at around 1.35-1.34 %. In terms of exports in
2015, Indonesia was ranked fifth in the Organization of International
Cooperation (OKI) countries as the largest textile exporter after Bangladesh,
Turkey and Pakistan.
The Muslim fashion industry in Indonesia began to show slow
development in 2010 which was directly proportional to the increasing need
for Muslims to dress in accordance with sharia provisions, where Indonesia
was ranked 3rd as a consumer of Muslim fashion and increased in 2017 which
has the potential to become a target for imported products. Furthermore,
based on data from The State of Global Islamic Economy Report 19/20,
Indonesia is ranked 2nd as the country that develops the best Muslim fashion
in the world. This shows that Indonesia has a greater opportunity to become
a global Muslim fashion center.
The Ministry of Industry estimates that Muslim fashion is capable of
absorbing a workforce of 1.1 million people or around 29 % of the total 3.8
million workforce in the fashion industry. Apart from that, in 2016 Muslim
fashion also made a direct contribution to the GDP of the feysen sector,
namely 28.9 %. This shows that the Muslim fashion sector makes a direct
contribution to absorbing labor and increasing Gross Domestic Product
(GDP).
With the many opportunities in the Muslim fashion sector, it is
possible that there are also challenges for the Muslim fashion industry to
encourage the development of the halal industry in Indonesia.
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Several challenges for the Muslim fashion sector include:
1. The Indonesian Muslim fashion market size has only reached US$ 357.6
million compared to other OIC countries which reached US$ 191 billion.
2. Raw materials, such as cotton textiles, amounting to 99.2 percent are still
imported from other countries, such as China and America, whose halal
traceability is still questionable. However, on the other hand, Indonesia
has abundant natural resource potential for making materials textile.
3. There is a minimal level of knowledge about marketing for small and
medium businesses, so many still only use conventional or offline
marketing methods .
4. There is no centralized incubation for marketing halal products,
especially Muslim fashion.
5. Capital for small and medium businesses because bank interest is quite
high.
Things related to halal fashion include:

1. Fashion Halal
Fashion is a way of life of society that is popular in a certain period
and is influenced by certain cultures and times. Traxell and Stone describe
fashion as a style adopted and used by the majority of groups in a certain
period in their book "Fashion Merchandising." This term shows that a
person's daily life is part of fashion .
The quality of the halal industry is meant for everyone, not just
Muslims. Halal is a way to fulfill the requirements or desires of the general
public, but for Muslims, it is a requirement in their religious beliefs. The
Indonesian Ulema Council carries out the process of certifying halal goods
in Indonesia (MUI). Anyone can be creative as long as the goods or services
are available, and business people are not limited to Muslims or Muslim
countries only. Consumer Behavior defines fashion as a social diffusion
process in which groups of consumers will adopt new styles (Rizki 2020)
Social class and level of society impact popular fashion. High
fashion is a term used to describe patterns and fashions frequently worn by
a select group of fashion leaders, namely those who adapt most quickly to
changes in fashion. High-end fashion users tend to be those with middle
to upper incomes because these trends are usually made, produced and
sold in small quantities at relatively high prices.

This clothing is usually worn by socialites, celebrities, business
people and politiciana in Indoneaia. The termamaaa fashion or volume
faahion deacribe trenda and patterna that are popular among the general
public. The lower middle class usually produces and sells this type of
clothing in large quantities at low prices
2. Design Halal
Design is a framework or arrangement of lines, colors, shapes and
textures. Apart from that, it is also usually interpreted as an element or
elements consisting of shape, direction, color, value, mode, size and
texture (Yusmerita, 2007). Comprehensively, design is a design or
description of an object that is made based on the arrangement of lines,
shapes, colors and textures. Based on this understanding, it can be
concluded that design is a design that is arranged based on lines, shapes,
colors, sizes and textures into one unit, resulting in something beautiful
and attractive.
Design creation includes elements and principles which include:
1) Lines and directions; A line is a collection of points that have a
purpose and direction to express emotions, feelings and expressions.
2) Form; The form is divided into two, namely:
a) geometric shapes, such as triangles, quadrilaterals, cones, circles,
trapezoids, and cylinders;
b) free shapes, such as leaves, flowers and water droplets. The shapes in
clothing can include sleeves, collars, necklines, motifs, skirt shapes
and pockets.
3) Size; Size determines the length, shortness of lines and the size of
different shapes. The size of the clothing is used to determine the length
of the skirt, namely mini, midi, maxi and long dresses.
4) Light dark value; This value indicates whether the color contains
black or white. This value shows the lightness and darkness of the color
patterns used in clothing. Party clothing, for example, generally uses dark
colors or striking colors (ngejreng).
5) Color; Choosing the wrong color will look mismatched. The right
color combination will give a beautiful and attractive impression. For
party clothing, for example, to make it appear more lively, the colors used
are bright colors.
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6) Texture; Texture is the surface of an object that can be seen and felt.
In clothing materials, the surface properties of the fabric can also be seen
and felt, including soft, rough, smooth, thick, thin and translucent.
Fashion design or fashion design is creating clothing models. What is
meant by creating is expressing strong feelings driven by emotions, thereby
giving rise to or forming something new. So, creating fashion or fashion design
is creating something new about clothing fashion. People whose job is to
create fashion are called fashion creators or fashion designers. The stages or
steps for making a fashion design as stated by Widarwati are as follows:
1. Determine the source of ideas that will be used as the basis for making
fashion designs.
2. Draw body comparisons, body positions, according to the clothing model
that will be made. Determine the balance line, waist line, hip line and
knee line in the right place.
3. Draw parts of clothing according to ideas or ideas.
4. Delete unnecessary relief lines, leaving only the necessary design lines.
5. Gives texture to the design, so that the image looks more alive and gives
an idea of the materials used. Based on the definition above, fashion
design is a fashion design that is made based on design elements and
principles, made based on the correct steps. (Kadir 2023)
F. Fashion industry opportunities halal in Indonesia

The fashion industry contributes to Gross Domestic Product (GDP) in
the creative economy category, according to the Central Statistics Agency
(BPS). In 2016, donations amounted to 18.01% or IDR 166 trillion. In addition,
56% of all creative economy exports come from the sector fashion industry .
Apparel products provided foreign exchange of $4.48 billion in 2019 as
development continues to increase from year to year. However, if you look at
market share control, Indonesia only has a small global market share, namely
1.9%. This shows that the Indonesian fashion industry has not been able to
control the majority of the global market share and is proof that there are still
many growth prospects in this sector.

Figure 1.2: Main International Markets for Indonesian Clothing
Exports in 2021
Source: Jurnal.iain-bone.ac.id/2023
Main International Markets for Indonesian Clothing Exports in 2021

shows that non-Muslim countries receive a larger share of Indonesia's
garment exports. This shows the huge potential for growth in the halal fashion
business, in this case Muslim fashion for both men and women. In Indonesia
today, the fashion for women wearing closed clothes has developed into a
lifestyle. the practice of wearing covered clothing for cultural and religious
reasons. The Indonesian government is confident that it will be able to lead
in Muslim fashion thanks to the public's growing knowledge of the sector's
growth potential.
Various initiatives, such as the Modest Fashion Project (MFOP)
Program initiated by the Ministry of Industry, have been undertaken to help
achieve this goal. The program is run by bringing together designers and
teaching them about funding, production, and marketing. Opportunities can
be identified and mapped to gain support from several sectors as the halal
fashion business develops (Kadir 2023)
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G. Market opportunities for halal fashion products
The Indonesia Islamic Fashion Consortium (IIFC) has predicted that
Indonesia will become the world's Muslim fashion mecca in 2020. Because the
majority of the population is Muslim. In the end, this prediction was correct
because the Muslim fashion industry in Indonesia continues to experience
rapid development to this day.
Graph 1.3: Total Population of Indonesia by Religion, 2010-2050
Source: ukmindonesia.id/2023
As many as 87% of Indonesia's population is Muslim. It even has the

potential to continue to grow every year. That amount is more than enough
to become the target market for domestic Muslim fashion products . This
potential is also increasingly being encouraged by "hijrah" influencers who are
also promoting Muslim fashion in various fashions. Even a number of the
influencer there's something finally launch collection Muslim fashion itself is
appropriate with style they each .
With thereby the Muslim fashion industry in Indonesia will the more
diverse And diverse color so that No surprised Indonesia was crowned become
Qibla Muslim fashion world. Muslim Fashion Industry Contributes Growth
Largest Economy in Sector Economy Creative. A number Ministry in
Indonesia with Committee Economy And Industry National (KEIN) works
The same push development of the Muslim fashion industry in Indonesia .
The reason because of the Muslim fashion industry it turns out has
become contributor biggest growth economy creative in Indonesia. This
matter supported by uniqueness design fashion Indonesian Muslims included

batik elements and weaving so that become characteristic typical separately If
compared to with design Muslim fashion on generally. Objective export main
product Indonesian Muslim fashion turns out is the United States of America
(USA). However , if compared to with Indonesia, population Muslims in
America Union become minority .
In fact , from 10 countries main objective export Indonesian Muslim
fashion , only 2 countries with residents majority Muslims . Indonesia is
targeting the rest number of countries resident the Muslim No too Lots.
Export product Muslim No always must to country with amount resident
Muslim the most . Precisely strategy This can support development of the
Muslim fashion industry the more known world . Proven , strategy This can
said Enough succeed see a number of original fashion company country Uncle
Samstart launch collection fashion Muslims. Call just such as DKNY, Dolce &
Gabbana (D&G), and Nike.
H. Halal E-commerce
Currently, people's lifestyle and needs are met through digital
transactions which can be done through e-commerce or online marketplaces.
On the one hand, there are not many marketplaces that focus on selling halal
products (goods/services) and transacting according to sharia principles. On
the other hand, conventional e-commerce also does not pay special attention
to the halalness of a product, including the suitability of transactions and
business models with Islamic sharia. Therefore, it is necessary to develop halal
e-commerce both from the product and payment system aspects.
This can be done by building halal e-commerce, namely ecommerce
that specifically sells halal products and uses transactions and payment
systems that comply with Islamic sharia. In line with the increasing halal
industry in Indonesia, e-commerce is a digitalization of business that can play
an important role in its development. The halal industry must adopt and
integrate digital strategies, both in terms of production, financing and
marketing via digital platforms.
Seeing the opportunities and challenges in the Muslim fashion sector,
there is a need for integration with digital technology to encourage the
development of marketing for the Muslim fashion industry in Indonesia, one
of which is through halal e-commerce with the development of an online
marketplace and a halal payment system. Based on data from the Central
| 33
Statistics Agency, in 2016 it was recorded that the number of ecommerce in
Indonesia reached 26.2 million, an increase of 17 percent over the last 10 years.
Halal e-commerce can be a solution in encouraging the development
of the halal industry in Indonesia, especially in the Muslim fashion
sector. With halal e-commerce, business actors can run their business online
by utilizing the internet network to facilitate every transaction. This will also
make it easier for consumers to search for and identify Muslim fashion on a
special platform for halal products (Riska Delta Rahayu 2021, 2–3)
Industry Muslim fashion own potency very market big both in
Indonesia and abroad. Moreover, sales product Muslim fashion inside country
Alone can soaring tall on moment moment certain, ie when enter the month
of Ramadan as well Eid Fitri. Because Muslims become race the majority in
Indonesia, of course they want to operate worship fast And celebrate day
victory with clothes best. No wonder, on months the ecommerce platform as
well as social media pen uh with inspiration as well as advertisement product
Muslim fashion.
Based on transaction and behavioral data from more than 200
thousand consumers of Muslim fashion products on e-commerce platforms
for two consecutive weeks at the beginning of the month of Ramadan, here
are the most popular Muslim men's and women's fashion items.

Figure 1.4: Comparison of the Best Selling Muslim Fashion Products
for Men and Women in 2022
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Source: ukmindonesia.id/2023
All the potential that exists for marketing Muslim fashion products,
especially in Indonesia, starting from the Muslim population which is more
than 80 percent, the mecca of Muslim fashion, to the momentum of
celebrating religious holidays which are always lively are good first steps for
starting a Muslim fashion product business .

However, no means start business in the field This without careful
planning. Of course in world business, as good as whatever the opportunity
still required good strategy so that when live it can produce profit in time
upcoming . One of the Muslim fashion product items that is experiencing the
fastest change in trend is the hijab. Currently, we can see various types of hijab
from various materials, shapes, motifs, and styles of wearing. Therefore,
entrepreneurs must always know and follow every fashion development in the
Muslim fashion industry.
Because usually customers who want to buy a fashion product will
definitely look for items that are trending or hype at that time. If
entrepreneurs are very updated and understand consumer needs, of course
the Muslim fashion business will become a favorite of customers and make
big profits.
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Chapter 4
HALAL PHARMACY INDUSTRY
Sri Delasmi Jayanti, S.E., M.Acc, Ak,Ca, Desti Fitri Hotimah
A. Definition of Pharmaceutical Industry

Indonesia's economic activities are not far from industrial activities.
Industry is an activity to produce a product starting from processing raw
materials, semi-finished and finished goods so that they have higher value and
benefits for use and sale. Industry itself has various sectors, including industry
in the pharmaceutical sector. The pharmaceutical industry is a business entity
that carries out drug production activities, and is required to be able to
produce drugs that meet the requirements, namely efficacy, quality, safety
with safe doses for the purpose of body health, and has permits and complies
with applicable regulations that have been determined. through Regulation of
the Minister of Health of the Republic of Indonesia Number
1799/MENKES/PER/XII/2010 (Priyambodo, 2007). The characteristics of the
pharmaceutical industry that need to be considered are:
1. This industry is strictly regulated from registration, methods and stages
of manufacturing, distribution and product trade.
2. Oriented towards economic and social aspects.
3. It has a high risk because it is related to human health.
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4. Always carry out the latest research and innovation, so as to produce
better, more effective and safer products,
The pharmaceutical industry itself can be categorized into several
groups, namely the pharmaceutical research (innovation) industry, synthetic
industry, pharmaceutical manufacturing industry, and pharmaceutical
services industry.
B. Pharmaceutical Company
Pharmaceutical companies are companies that operate in the field of
development, researching matters related to health, and distributing
medicines. In medicinal products, pharmaceutical companies group drugs
into 3 types, namely Over The Counter (OTC), logo generic drugs (OGB), and
ethical drugs which must be based on a doctor's prescription. Several factors
have an influence on a company's success, such as employees, location, good
strategy, management system and good marketing techniques (Sampurno,
2017) .
C. The Importance of the Halal Pharmaceutical Industry

The requirement to use and always choose halal products is an
obligation for Muslims. In this case, the government is required to take part
in providing halal protection and guarantees for products circulating within
the Muslim community. Certainty or guarantee of the halalness of a product
can certainly provide a sense of security and pleasure for people who consume
or use it. Through this, the halal industry is currently becoming a trending
topic among society, including in Indonesia and all corners of the world. The
halal industry also has a role in developing the country's economic level,
including the halal pharmaceutical industry. (Nur Azizah, Maulida
Rizkinnikmatussolihah, 2022) .
The pharmaceutical industry is an industry that has an important role
in human life, where this industry supports human health so that they remain
in a healthy condition to be able to carry out daily activities. The health
category according to the United Nations Development Program (UNDP) is
included in one of the factors in measuring human development indices, such
as the Human Development Index (HDI), Gender Development Index (GDI),
Multidimensional Poverty Index (MPI), and Gender Inequality Index (GII)
(Syahrir et al., 2019).

This has an impact on the ingredients to be consumed which must be
guaranteed to be halal, both through the content of the ingredients to be used,
the process of obtaining, processing and distribution, including the
consumption of pharmaceutical supplies spread throughout the community.
This is not only related to religious beliefs, but also related to health,
economic and security aspects. So in line with this, business actors, including
those in the pharmaceutical industry, fulfill these rights, in accordance with
the laws and regulations implemented in Indonesia. (Astuti, 2020). Indonesia
has a Muslim population of 241,699,189 people in 2022.
Figure 1. Number of Indonesian Population According to Religion 2022
Source: Directorate General of Population and Civil Registration
(Dukcapil) Ministry of Home Affairs
It's just very regrettable, it turns out The capacity of the halal industry
in Indonesia is not yet able to work optimally, especially in the halal
pharmaceutical sector. This can be seen through data on Indonesian industry
rankings in this field which have gone up and down in the last 3 years, namely.
namely ranked 19th in 2020, ranked 6th in 2021, and ranked 9th in 2022 based
on the State of the Global Islamic Economy Report – UAE (Report, 2022).
The State of the Global Islamic Economy Report is a report that
conveys a ranking of the completeness of the Islamic economic ecosystem in
a country using several indicators. These indicators include sharia finance,
halal food, Muslim fashion, halal tourism, as well as halal cosmetics and
medicines. This report is published with the aim of developing and providing
an overview for stakeholders in the Islamic economic ecosystem. In addition,
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this report also serves as a benchmark and reference for the development of
the Islamic economic industry throughout the world based on global Islamic
economic indicators. The following is a comparison between halal industry
sectors in Indonesia and other countries based on indicator index numbers
(Harmoko, 2022).
Figure 2. Comparison of Indonesia's Halal Sector with Other Countries
Source : State of the Global Islamic Economy Report – UAE
Regarding this matter, both the government, the pharmaceutical

industry and society must try to be more optimal in developing strategies to
improve the halal pharmaceutical industry, and be able to see the big
opportunities that exist considering that Indonesia has a very large ability to
achieve rank 1 in the halal industry including pharmaceuticals based on the
number of its inhabitants.
D.Growth of the Halal Pharmaceutical Industry in Indonesia

World consumer demand for consumer products is increasing day by
day, both in terms of food, beverages, fashion, tourism, as well as
pharmaceuticals and cosmetics. Halal pharmaceutical products should not
contain/be derived from haram ingredients. The reason for the extraordinary
development does not only come from the materials Ter free from non-halal
elements , halal pharmaceutical products also guarantee product quality that
complies with sharia standards (Syarif & Adnan, 2019). Seeing this
opportunity, the halal industrial sector is participating in providing halal-
based products and of course this is very well received, especially for Muslims.
Indonesia must take part in developing the halal industrial sector.
This is proven by Indonesia being ranked 6th in 2021 and 9th in 2022.
Despite experiencing a decline in ranking, the projected value of consumption
of Indonesian halal products in 2020 and 2025 has increased, namely 5.13 US$

billion in 2020 and 6.81 US$ billion in 2021. This achievement can continue to
increase as the year progresses. However, currently, the halal industry in
Indonesia is still dominated by the food and cosmetics sectors, even though
other sectors are no less important and need to be developed (Faridah, 2019).
A halal certificate is a statement that contains information about
whether a product is halal and is stated to be in accordance with the
provisions of Islamic law and the standards of the Indonesian Ulema Council
(MUI). With this certificate, it provides assurance and peace of mind for
consumers that the medicines produced and consumed are guaranteed to be
halal (Meilani et al., 2022). In the pharmaceutical sector, in Indonesia there
are already eight sharia hospitals and quite a few medicine manufacturers who
have verified halal (Adinugraha & Sartika, 2019).
The Indonesian government's actions in encouraging the Indonesian
economy and pharmaceutical industry include :
1. Law (UU) Number 33 of 2014 concerning Halal Product Guarantees.
This law was issued to regulate and guarantee supply p halal products,
determine raw materials manufacture of products that are declared
halal, whether from plant, animal, microbial or raw materials through
chemical, biological or genetic engineering processes. Apart from that,
PPH is also determined which is a structure of activities to guarantee
the halalness of products including the provision of materials,
processing, packaging, storage , product presentation , distribution and
sales.
2. Certificate policy through PMK No. 57 of 2021 concerning Service Tariffs
for Public Service Agencies, Halal Product Guarantee Organizing
Bodies at the Ministry of Religion (PMK RI, 2021).
This policy is designed to be able to increase the level of industrial
competitiveness and industrial efficiency, so that it is able to compete
not only in Indonesia but throughout the world. It is hoped that other
strategies such as infrastructure development, a halal guarantee
system, and increasing the halal contribution to the trade balance can
increase so that the Indonesian economy will be even better.
3. Policies in Presidential Regulation (PERPRES) No. 6 of 2023 concerning
Halal Certification of Medicines, Biological Products and Medical
Devices (Government of Indonesia, 2023) .
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4. Increasing the market for halal products .
In Islamic sharia it is necessary to review consumption of products
whose processes or ingredients are prohibited. This makes industrial
business players create a halal market specifically for Muslims. With
the creation of this halal market, it is hoped that it will be able to
compete in Asia Pacific and Africa so that these products can be known
in various countries .
5. Development in other fields that support the halal product industry
Apart from countries that are trying to develop their products to other
countries, they also need to guarantee halal as one of the qualities in
both Europe and America and supported by quality technology.
The new halal guarantee declared by the Ministry of Religion
(Kemenag) on October 17 2021 provides an obligation for business actors to be
halal certified. Previously, in Law No. 33 of 2014 it was stated that the
obligation to be halal certified for products in circulation came into effect 5
years after the law was promulgated. Starting from 17 October 2014 to 17
October 2019. However, currently, between 2019 and 2021, priority is still being
given to the food industry. So the pharmaceutical industry will begin to gain
legal force on October 17 2021.
Currently, Indonesia has 206 companies operating in the
pharmaceutical industry. This figure consists of, among others, 24
multinational companies, 4 state-owned companies, and 178 national private
companies. According to information from the Institute for the Study of Food,
Drugs and Cosmetics, the Indonesian Ulema Council, only around 25.7% of
all pharmaceutical companies in Indonesia which already have halal
certificates for their products, meaning that there are only 53 companies that
have undergone the halal certification process as of October 2019. Meanwhile,
as of March 2021, the number of medicines (drugs and vaccines) certified as
halal was 2,586, of which 19,483 were recorded at BPOM. So, the opportunity
to increase halal certification in the pharmaceutical and herbal medicine
industry in Indonesia is still very broad (Alfath, 2023).
E. Challenges of the Halal Pharmaceutical Industry

The implementation of Halal Product Guarantee regulations in the
pharmaceutical industry in Indonesia faces challenges, namely first, the lack
of suppliers to obtain halal raw materials and halal management obstacles.
Facts regarding halal product guarantees pharmaceutical field still very

worrying . In fact, in vaccine products, which have met the provisions and are
in accordance with data from the MUI (Indonesian Ulema Council, 2020),
only three vaccines have passed halal certification, namely three vaccines. for
meningitis. Moreover, according to data from LPPOM MUI, of the 30
thousand types of medicines that have been listed at BPPOM and distributed
in the community, only 34 medicines meet the requirements and have halal
certificates. (Hijriawati et al., 2018)
Second, raw materials for the supply of the halal pharmaceutical
industry are still obtained by importing from abroad, with 95% coming from
imports, such as China, Europe, America and India (Alfath, 2023). There is
relatively little research examining the halal standards of the pharmaceutical
industry in Indonesia. (Hudaefi & Jaka, 2021). in his research stated that the
legal sanctions stipulated in the regulations regarding Halal Product
Guarantee (JPH) are only administrative sanctions so they do not provide legal
certainty. This causes compliance with halal standards in pharmaceuticals to
be less than optimal. Even though it has been mandated by law, the facts
regarding halal guarantees in pharmaceuticals tend to be worrying compared
to halal guarantees in food products because public awareness, both
consumers and producers of food products, is relatively better (Sholeh, 2015).
Third, namely the government's efforts to socialize the halal industry to the
public, halal product certification, company halal certification and consumer
protection outreach, as well as in regulating halal logistics obligations. Fourth,
in terms of organizing and development, the challenges in this aspect are the
lack of certified organizations, promotion, low competitiveness, production
processes, halal control in logistics processes, and the process towards
national and international standards which is quite difficult. Fifth, the
challenges of existing resources and society as consumers, namely, lack of
optimal use and optimization of existing natural resources, minimal
knowledge of human resources, and low response and public understanding
of the urgency of the halal pharmaceutical industry (Utari et al.,2022).
| 45
Chapter 5
MUSLIM FIENDLY TOURISM
INDUSTRY
Muhamad Rahman Bayumi, S.E., M.E, Vinka Cindy Meidelin
A. Basic Concept Of Halal Tourism

The basic concept of halal tourism is to provide services and facilities
that are in accordance with Islamic character and culture to Muslim tourists
who travel to a destination that does not conflict with Islamic teachings.
However, in its development, anything that is halal is consumed not only by
Muslims but also by non-Muslims because basically halal is synonymous with
hygienic (clean/free from disease) and good. So halal tourism is not exclusive
to Muslims, but is also inclusive for non-Muslims. So what is the meaning of
halal tourism? The definition of "halal tourism" in academic circles is still very
dynamically discussed and differences cannot be avoided. The terms most
frequently used are Islamic Tourism and Halal Tourism. Carboni defines
Islamic tourism as tourism in accordance with Islam, which involves Muslim
people who are interested in maintaining their personal religious habits while
traveling. He is of the view that Islamic tourism is not limited to religious
purposes and is not exclusive or only exists in Muslim countries (Carboni,
Perelli, and Sistu, 2014: 1-9). Zamani-Farahani and Henderson argue that
Islamic Tourism and Halal Tourism are the same concept. What is meant by
| 47
Halal is the provisions of Sharia law, in the sense that a person is said to be
legally carrying out an activity, if it is carried out in accordance with the
provisions of Islamic Sharia (Zamani-Farahani and Henderson, 2010: 79-89).
Thus, what is meant by Halal Tourism is tourism that in accordance with
Sharia principles, so it is also called Sharia Tourism. (M. Djakfar, 2017: 11)
However, what differentiates it in this sense is that it requires the
existence of dynamic Sharia objectives that can be implemented by the parties
involved in Islamic-based tourism. Meanwhile, according to Sofyan, Islamic
tourism is tourism based on the provisions of Islamic Sharia (Sofyan, 2012: 33).
Munir Caudry said Islamic tourism is a new framework in tourism which is
not only religious tourism, such as Umrah and Hajj.
Furthermore, according to Puangniyom, halal tourism is an activity
rooted in Indonesia with Islamic principles. Based on this view, halal tourism
is carried out by preparing tourism programs and places designed to suit the
needs of foreign tourists (Puangniyom, 2017: 196). Therefore, whatever terms
are used, from Islamic tourism to halal tourism, Muslim friendly tourism and
family friendly tourism, in substance
1) The use of the term Halal according to the Indonesian Ministry of Tourism's
Halal Tourism Acceleration Committee, DrAnang Sutono, is related to
industries in the world that use halal, such as HalalBooking.com,
Serendipity Tailormade, tourism conferences or events as follows: World
Halal Tourism Summit, Abu Dhabi Halal Tourism Conference, Spain &
Turkey Arabian Travel Market, Dubai Media covering Halal Tourism,
interview conducted on 18 August 2019.
2) The term Muslim Friendly Tourism is used in the Islamic Tourism Center
(ITC) Malaysia, CrescentRating, Shaza Hotels, COMCЕС, (The Standing
Committee for Economic and Commercial Cooperation of the Organization
of the Islamic Cooperation), Tripfez and articles in various media
3) "The Global Islamic Economy Summit (GIES) is the world's largest and
most comprehensive forum dedicated to the Islamic Economy, there are
many similarities in goals and objectives. Therefore, in this book the title
and terms used are halal tourism which includes the meaning of other
terms. The use of the term "halal tourism" is based on the development of
Islamic-based tourism which is more familiar globally, also in the
Indonesian context the term halal existed and developed earlier so that it is
more suitable, better understood and accepted by Indonesian society. Halal
tourism is temporary travel that pays attention to the values contained in

Islamic faith, worship and ethics so that the goal of happiness in this world
and the hereafter is achieved.
The Ministry of Tourism and Creative Economy and MUI determine
four main parts of halal tourism (Sucipto and Andayani, 2014: 12) including
culinary, Muslim fashion, cosmetics-spa, and hospitality. From the halal
tourism paradigm above, it can be concluded that halal tourism in Indonesia
has indicators and can be summarized as follows (Jaelani, 2017: 28-29):
1. The existence of a cultural framework related to Islamic tourism, namely
Islamic cultural sites (Al-Hamarneh, 2011);
2. The existence of tourism which is synonymous with Muslims who adhere
to Islamic values (Shakiry, 2008)
3. There is tourism associated with religious travel, namely pilgrimages and
visiting holy areas in the Islamic world (Hassan, 2007).
4. There is a scope of Islamic tourism, namely tourists who mix with a moral
scope based on Islamic values and standardized Islamic ethics (Hassan,
2004).
5. The existence of Islamic tourism which is related to travel that is intended
to motivate safety or activities that originate from Islamic encouragement
(Din, 1989: 542-563).
Based on the explanation and understanding that has been explained,
whatever the form of activity and activity as long as it is within the scope of
the five criteria above, the tourism activity can still be called halal tourism.
The presence of a written work that specifically examines Halal
Tourism with the theme of the Muslim-Friendly Tourism Industry is a role
that is expected from academics, which will certainly really help the Halal
Tourism development program in Indonesia.With this work, I hope to be able
to enrich the treasures of scientific work in the field of tourism, especially
halal lifestyle-based tourism which is still rare. With this work, I hope that it
will open new insights for interested parties in developing tourism in
accordance with Indonesian cultural norms and ethics.
| 49
Table 1.1
100
50
0
List of the Best Muslim-Friendly Destinations in the World by Global Muslim Travel
Index/GMTI (2023)
Indonesia Malaysia Arab Saudi Uni Emirat Arab

Turki Qatar Iran Yordania
Bahrain Mesir Kuwait Singapura
Oman Uzbekistan Brunei Darussalam Tunisia
Morocco Pakistan Lebanon Kazakhstan
Kirgizstan Inggris
Seen from the table above, Indonesia is ranked at the top of Muslim-
friendly destinations in the world according to the 2023 Global Muslim Travel
Index (GMTI) issued by Mastercard and CrescentRating. Not only Indonesia,
Malaysia also occupies the same rank with an index score of 73 points each.
The GMTI measures the index for 138 Muslim-friendly tourist
destination countries. This index assesses destinations based on four main
criteria, namely access, communication, environment and service. "Indonesia
and Malaysia together hold the prestigious top position in GMTI 2023," said
GMTI in its report.
Previously, Indonesia was ranked first in the 2019 GMTI report, while
Malaysia has consistently been at the forefront since 2015.
According to GMTI, Indonesia and Malaysia are both superior in
assessing communication criteria that include destination marketing. Apart
from that, the two countries are also at the forefront in assessing service
criteria that suit the needs of Muslim tourists. The scope of the service
assessment includes halal dining options, easy access to prayer places,
Muslim-friendly accommodation, halal food and prayer places at the airport,
as well as heritage and charming experiences during the trip.

B. Halal Tourism To Support The National Economy
A report from Tourism Worldwide-Statistics & Facts states globally
that travel and tourism directly contributed around 2.9 trillion US dollars to
GDP in 2019. The tourism report above includes the type of halal tourism that
is now growing rapidly in the world. Furthermore, the travel report from
Travel & Tourism Economic Impact World (WTTC, 2018) states that the
tourism sector is one of the sectors that is counted as a contributor to the
country's foreign exchange. This is related to visits by foreign tourists to the
countries they visit, including their arrival to Indonesia or domestic tourists
who visit tourist attractions. The arrival of foreign and domestic tourists,
especially those from the Middle East, Asia and Australia, certainly has its own
value from an economic perspective. Their arrival is very important because
it contributes to the country's foreign exchange. Therefore, halal tourism
activities can be said to support the country's resilience because it can grow
the national economy.
The existence of halal tourism that guarantees the provision of
appropriate facilities, especially those that are Muslim-friendly (halal) and
hygienic, will involve the community, especially local communities and other
service industries that support the running of the halal tourism industry. The
involvement of various parties will increase employment opportunities and
economic income for local communities or other supporting industries. From
this it is clear that the existence of halal tourism can strengthen and support
the national economy.
The halal industry which produces halal products in recent years has
experienced rapid development in the global world. Business based on the
Islamic economic system is not only developed by countries with a majority
Muslim population, but also countries with some non-Muslim populations
such as England, Japan, Taiwan, South Africa and so on (GMTI, 2019). Because
Indonesia is the country with the largest Muslim population in the world, its
involvement in participating in producing these products is very strategic and
has the opportunity to become the country that produces the world's largest
halal products. As of January 2018, the world population had reached 7.53
billion people. Those who are Muslim number approximately 1.8 billion
people (24.1%). It is estimated that by 2030, the percentage of Muslims
worldwide will increase to 26%. So that it can influence Islamic products or
halal goods which can significantly color world trade. Global exports and
imports of halal goods are very significant. It is not surprising that the world's
| 51
big business groups, such as Nestle and Indofood, really care about making
and selling halal products.
Halal products that are developing in the world, including in
Indonesia, will come into contact with the interrelated halal lifestyle of
Muslim communities. Halal products also at the field level will certainly
support each other, especially in the halal tourism industry. The existence of
halal tourism, which cannot be managed independently, will involve other
halal products that can support the running of tourism.
The halal industry which produces halal products is considered a great
opportunity which is a necessity and a halal lifestyle. Chairman of the
Indonesia Halal Lifestyle Center (IHLC) Sapta Nirwandar explained that the
halal trend is very prospective, both from an Islamic and business perspective.
The halal industry is now a global trend, (Republika) 8/30/2016). Sectors
experiencing development in halal products include food and beverage,
finance, Inayen, cosmetics and medicine, media and tourism. Based on the
report from the State of the Global Islamic Economy in 2018-2019, the Islamic
Economy Market Size in 2017 was 2,107 billion US dollars and is estimated to
reach 3,007 billion US dollars in 2023.
Business prospects that give birth to halal products of each type are
sharia finance (2017: 2,438 billion US dollars - 2023: 3,809 billion US dollars),
halal food 1001,711,303 billion US dollars - 2023: 1,863 billion US dollars), halal
tourism (travel) (2017: 177 billion US dollars - 2023: 1/4 billion US dollars),
fashion, media, pharmaceuticals and cosmetics in 2017-2023 also have
enormous value.This type of business in the field of Islamic economics is not
only developing in countries with Islam as the majority population, but non-
Muslim Western countries are also taking part in developing it.
The 2015 Global Islamic Economic Report reported that the
opportunities for industries that produce halal products worldwide are
enormous, with the economic value of the halal industry reaching 18 trillion
US dollars. Based on research results from Research, 73% of Muslims'
consumption behavior is determined by the values of their religious teachings,
where they will avoid consumption that is prohibited/haram (such as pork,
alcohol and animals slaughtered not in accordance with Islamic teachings).
So in terms of consuming anything, they must be absolutely sure that what
they consume is halal. The halal market with all its products has truly become
a big market in the world, and not just a niche market. The halal market has
evolved, from food, finance, to lifestyle. Including the current Muslim lifestyle

is liking travel that is in accordance with Islamic teachings, namely halal
tourism.
C. Transformation Of Halal Tourism

The transformation of the concept of halal tourism is developing
through changes in terminology which can be separated into two approaches,
namely religious tourism and sharia tourism. Religious tourism is the oldest
tourism in the tourism context (the oldest tourism in the world) and is
thought to have existed before the development of conventional tourism
(Fatkhurrohman, 2017). People who undertake pilgrimages are more related
to their religious background as a manifestation actions/behaviors that are
specific to the elements of piety and penance. Several major world religions
have been practicing religious tourism traditions for thousands of years
among others, Jews regularly visit Jerusalem, Hindus make pilgrimages to the
Ganges River, and Muslims annually worship in Mecca and Medina (Raj &
Morpeth, 2007).
The next development is known as halal travel 2.0, which makes
technology the main driver of halal tourism activities. The development of
halal tourism is in line with the use of communication technology such as
artificial intelligence, augmented reality and virtual reality. The three of them
encourage open access and information for Muslim tourists in a more
comprehensive manner in the current 4.0 revolution. Furthermore, intensive
use of social media is being carried out to expand the reach of the halal
tourism market, targeting both Muslim and non-Muslim markets.
Table1.1 Comparison Of Halal Travel 1.0 And Halal Travel 2.0
Comparison Halal Travel 1.0 Halal Travel 2.0

Target Selling tourism products Involving tourist to
to Muslim Tourists develop the best
solution
Basic Consideration Globalization-technology New technology , social
activists and the
millennial generation
Reaching The Tourist are looking for Active and dynamic
Muslim Tourist solutions to fulfil their tourist
Market needs for worship
Source: GMTI,2019
| 53
Apart from these comparisons, halal travel 1.0 and halal travel 2.0 also
have a changing target market. The halal travel 1.0 phase focuses on the target
market of female travelers and non-OIC countries or non-Muslim markets.
Currently halal travel 2.0 has a target market that focuses on grounding the
halal lifestyle and integrating artificial intelligence with professional players
in the halal tourism sector.

Chapter 6
MASS COMMUNICATION
SHARIA
Rachmania, S.E., M.Si, Afifah Nuraisyah
A. Halal Media and Recreation

Media and entertainment are two objects that cannot be separated
from everyone's daily activities. Media and entertainment complement each
other to meet information needs and relieve fatigue. Media is a source of
information that people need in living their daily lives, and entertainment can
be a means of relieving fatigue in various activities that are very heavy and
tiring (Utami et al., 2021).
The development of increasingly sophisticated technology has made it
easier for humans to utilize these two objects. We can access various
information and entertainment media easily just by equipping ourselves with
a smartphone that is very functional and can be easily carried anywhere. The
increasing use of mobile phones has increased media and entertainment
consumption (Maya et al., 2021). This is in line with the growth of the halal
media and entertainment industry market. It is projected that in 2023, media
and entertainment industry revenues will reach US$ 2.6 trillion. So, it can be
concluded that currently the media and entertainment industry is an
| 55
important catalyst for global economic growth, surpassing the achievement in
2021 which only earned approximately US$ 232 billion (DinarStandard, 2022).
Meanwhile, halal media and recreation in Indonesia is also expanding
its portfolio of offerings, ranging from Islamic miniseries, films and online
programs to applications for the lifestyle of Muslim consumers. Creative
industries with Islamic nuances are an attraction for Indonesian people. There
are also creative works such as films and anime based on novels. For example,
'Ayat Ayat Cinta', originally a fictional story by Habibrahman Siraj, was made
into a film and shown in cinemas, captivating audiences across the country
(Khaeruddin, 2022). Various soap operas incorporate Islamic values into some
scenes to illustrate the value of the product to the majority of the population
in countries that follow Islam as a religion.
Online entertainment providers with streaming platforms such as
Netflix, Viu, and WeTV are adapting and creating new content to attract
Muslim consumers. They present a treasure of Islamic cultural values that suit
the characteristics of Muslim consumers as an integral part of their
broadcasts. Other providers and developers also offer children's
entertainment on various platforms with themes of Islamic values, sermons
and sermons (Utami et al., 2021). This is inseparable from the projection that
Muslim spending in the media and recreation sector will reach US$232 billion
in 2023 and is estimated to increase to $309 billion in 2024 (DinarStandard,
2022).
B. Media and Entertainment Regulations in Indonesia

The media and leisure industry is currently a potential sub-sector of
the creative industries. In parallel with the increase in domestic film
production and viewership, the GDP growth rate of the film, animation and
video subsector also increased rapidly (Maya et al., 2021). With the spread of
various video distribution apps and services, the possibilities for movies are
expanding more and more. However, compared to the halal food and beverage
sector, support for halal media and leisure clusters is still considered
insufficient. Therefore, the existence of regulations is considered to be of great
importance in order to curb piracy and piracy and provide regulatory
incentives to support Islamic media and leisure programs (Andrew Arato et
al., 2006).

The following are the regulations governing the media and
entertainment industry in Indonesia:
1. Law Number 36 of 1999 on Telecommunications
This law regulates the enforcement and regulations that all
telecommunications operators and users in Indonesia must comply with.
These include telecommunications principles and objectives, rights and
obligations of telecommunications operators and users, numbering,
interconnection, tariffs and telecommunications equipment, and criminal
provisions and sanctions (BPK, n.d.).
2. Law Number 40 of 1999, on Press
This law guarantees freedom of the press as a human right of the people.
Unless the domestic press is subject to censorship, embargo, or embargo,
the domestic press has the right to solicit, receive, and disseminate ideas
and information, and everyone has the right to seek, receive, and
disseminate ideas and information. You have the right to receive and
disseminate it. You have the right to transmit and receive information from
and disseminate your personal development and social environment. You
also have the right to search for, receive, possess, store, process, and
transmit information through any available channels (BPK, n.d.).
3. Law Number 19 of 2002, on Copyright
This law regulates intellectual property rights in the fields of science, art,
and literature based on ideas, processes, methods, or concepts expressed in
a unique and permanent form. Legal protection of copyright owners is
aimed at creating a better environment for the growth and development of
creative minds in the fields of science, art and literature (BPK, n.d.).
4. Law Number 32 of 2002 on Broadcasting
This law regulates the broadcasting principles applicable in Indonesia.
These include the principles, objectives, functions and governance of the
national broadcaster, regulations of the Indonesian Broadcasting
Commission, broadcasting services, public broadcasters, private
broadcasters, subscriber broadcasters, local broadcasters, foreign
broadcasters, broadcasters and Includes broadcast stations. Includes news
organizations, broadcast networks (both television and radio), licensing
and broadcasting activities (BPK, n.d.).
5. Law Number 33 of 2009 on Film
This law prohibits film activities and film companies from content that
encourages people to engage in violence, gambling, the abuse of narcotics,
psychotropic substances, and other prohibited addictive substances,
| 57
contains pornography, and causes conflict between groups. It is prohibited
to include ethnic, racist, and/or intergroup conduct that insults, harasses,
and/or desecrates religious values, or encourages people to commit illegal
acts, and/or damages honor and dignity. Violations will result in a written
warning, administrative sanctions, temporary closure and/or cancellation
or revocation of the permit, imprisonment of up to six months or a fine of
up to IDR 100 billion (BPK, n.d.).
C. Development of Indonesian Halal Media and Recreation

The development of technology in the lives of Indonesian people is
increasing rapidly from year to year, and the Internet is one of the information
technologies that is developing the fastest compared to other technologies.
The Internet allows people to easily send any information throughout the
world. Technology has opened people's eyes to technological change and
made interaction easier. Communication and information technology has not
only had a major impact on mass media, but also on human behavior and
social, personal and religious development (Ainun, 2021).
The media and entertainment industry is currently a sub-sector of the
creative economy industry which is classified as having high potential
(BAPPENAS, 2019). With the increase in domestic film production and the
number of viewers, the GDP growth rate of the film, animation and video
subsector increased rapidly. The potential of cinema is increasingly supported
by the proliferation of various video streaming applications and services that
are being developed. It turns out that the potential of this industry is still not
comparable to the contribution of halal media and entertainment in
Indonesia. Even though Indonesia is a country with the largest Muslim
population in the world, there are enormous opportunities for the
development of this industry (Maya et al., 2021).
During the first year of the pandemic, this media sector had a large
audience but had difficulty producing new content due to scope restrictions.
But as the world opens up, production is back in earnest, as are investments,
expansion plans and business developments to capitalize on growing demand
(DinarStandard, 2022).

Picture 1. Indonesia as TOP 4 Developer of a Strong and Healthy
Sharia Economy
Picture 2. TOP 10 Halal Media and Entertainment Industry Rankings
Source: Global Islamic Gateway 2022
Indonesia is able to maintain its fourth position in the world in terms

of developing a strong and healthy sharia economic ecosystem. The top four
positions remain unchanged compared to last year, with Malaysia maintaining
its lead for the ninth consecutive year. So Malaysia is number one, followed
by Saudi Arabia, United Arab Emirates and Indonesia. However, according to
the Global Islamic Economy Report, Indonesia is not even in the top 10 of the
world's top 15 countries providing halal services. Indonesia's halal media and
leisure sector was also not consistently listed in GIEI's top 10 from 2018 to 2022.
Although the Islamic finance sector often ranks in the top 10, it remains
relatively stagnant at 9th place and 10th place despite its progress over the
past five years. (DinarStandard, 2022).
| 59
Picture 3. Comparison of Halal Sector Industries in Indonesia
Comparasion of Halal Sector Scores in Indonesia 2018-2022

Source : Global Islamic Economy (2022)
140
122 119
115
111.6
120
100
80
80 71.5 69
65
54 57 57.961 58
60 52 50 52 49.9
46 47 45.3 43.6 444247.5 47
38 3437.9
40
1617
20
0
Islamic Economy Halal Food Halal Travel Muslim Fashion Halal Media & Halal
Recreation Pharmacueticals
and Cosmetics
2018 2019 2020 2021 2022
Source: Global Islamic Gateway 2022
The Global Islamic Economy Report 2022/2023 confirms that Muslim

spending on media and leisure is estimated to reach $231 billion in 2021 and
$308 billion in 2025. Global Muslim spending in the Islamic economy sector is
expected to increase by 9.1% in 2022, despite continued uncertainty regarding
the pandemic. By the end of 2021, spending levels in all these sectors except
travel had returned to pre-pandemic levels. Spending by the Muslim
community is expected to reach $2.8 trillion in 2025, with a four-year
compound annual growth rate (CAGR) of 7.5%.
The halal media and entertainment industry in Indonesia must
continue to develop, starting from films, miniseries, online content to
applications designed to meet the lifestyle needs of Muslims. However, we
found that public interest in works with Islamic nuances is still lower than
works that do not have Islamic nuances. Therefore, there are still many TV
programs that are far from Islamic nuances. Although this pandemic has
attracted the attention of many economic actors and caused significant
operational disruptions, the Islamic economy has experienced significant
growth in the past year, including accelerated digitalization, strengthening
trade agreements between OIC countries, and improving Islamic economic
performance (Utami et al., 2021).

The development of the Halal media and entertainment industry is
also still very low as the Indonesian government does not support this
industry. Especially in Indonesia, there are still few regulations, guidelines and
laws for the halal media and entertainment industry. So far, the government
still considers that halal entertainment content can only be classified as
religious content that focuses on major Islamic holidays such as the
Ramadhan series, Eid Fitri, Eid Adha and other major holidays. This means
that the legal framework for the halal media and entertainment industry is
still very limited (Ainun, 2021).
So far, government media regulations are still focused on traditional
media. Indonesia’s broadcasting laws currently in force include Law Number
33 of 2009 on Film, Law Number 36 of 1999 on Telecommunications, Law
Number 40 of 1999 on Press, Law Number 19 of 2002 on Copyright, and Law
Number 32 of 2002 on Broadcasting. Meanwhile, the MUI fatwa to regulate
the halal media and entertainment industry has not been ratified in Indonesia.
Research on legal products related to the Halal media and entertainment
industry in Indonesia has so far reached the stage of signing a memorandum
of understanding between KPI, MUI and the Ministry of Religious Affairs (KPI,
2019).
The existence of this law is aimed at ensuring the freedom of all
residents to follow their respective religions, and the state is obliged to
provide protection and guarantees regarding the halality of products.
However, the slow production of legal products in this sector indicates the
weakness of Indonesia's halal media and entertainment industry in global
competition (Mubarok & Imam, 2020).
The halal media and entertainment industry has great potential for
development in Indonesia. As the country with the largest Muslim population
in the world, Indonesia should be able to develop this industry (Mutafarida,
2017). However, due to the contribution of halal media and entertainment in
Indonesia and the insufficient regulation of this industry by the Indonesian
government, the huge potential of this industry has not been realized (Sup et
al., 2020).
| 61
D.Opportunities for the Halal Media and Entertainment
Industry in Indonesia
Globally, the halal media and entertainment industry continues to
grow and develop. The movement to create media content with Islamic
nuances as a response to anti-Islam rhetoric continues to grow well. In
Canada, the Mosque Film Festival is being held, and Islamic films are getting
more and more attention. This festival will bring together 40 films from all
over the world, and 10 short films with Islamic nuances will be screened. More
and more children's content is being developed, including ``Oman Animation
Tawasel,'' which was named Best Animation Series 2018 at the Cairo
International Animation Forum 2019. In addition to films and series, music
and podcasts have also become popular among viewers (Akil, 2014).
Indonesia offers great opportunities for the halal media and
entertainment industry as it is the country with the largest Muslim population
in the world. In fact, Hijra Fest is currently being held, a festival that explores
Islamic lifestyle services that brings together various Muslim individuals and
communities as a forum for sharing knowledge, experiences and stories, as
well as sharing Ukhwa Islamiyah Homeland. In terms of films/series,
Indonesia has the animations ``Nussa Rara'' and ``Riko The Series'' which are
the first steps in developing the halal media and entertainment industry,
introducing Islamic culture with modern practices, especially for children,
this provides education (Nadhifah & Khairuddin, 2021; Husna, 2021).
The growth of films, animation and videos continues to increase
significantly. In 2021, the global Muslim community could spend
approximately $232 million on the halal media and recreation sector,
estimated to reach $309 million in 2024 (DinarStandard, 2022). Below is a
comparison of the Muslim community's spending on the Halal industry across
various sectors. In Indonesia, the growth of the halal media and entertainment
industry can be influenced by various factors (Utami et al., 2021). Sharia
economic growth improved due to Indonesia's ranking in GIEI compared to
the previous year. Support from various Islamic organizations and the role of
the community.

E. Challenges of the Halal Media and Entertainment Industry
in Indonesia
Government regulation of the media and entertainment industry
remains focused on traditional industries. The laws that regulate broadcasting
in Indonesia are Law Number 36 of 1999 on Telecommunications, Law
Number 40 of 1999 on Press, Law No. 19 of 2002 on Copyright and Law no. 32
of 2002 on Broadcasting, and Law Number 33 of 2009 on Film (BPK, n.d.).
Based on existing laws, the regulations governing the media and
entertainment industry are still general in nature. Some regulations that
impact religion are still limited to normative statements that are not specific
to aspects of the halal industry or media (Mubarok & Imam, 2020).
For example, in Law Number 33 of 2009, Article 41 paragraph (1)
concerning prevention of imported films that violate religious values and
Article 48 concerning the obligation of film producers to protect religious and
moral values (Akil, 2014). Similar provisions are also regulation in Law
Number 32 of 2002, Article 5 on Broadcasting which aims to maintain and
enhance moral and religious values as well as national identity, and Article 36
which regulates the content of broadcasts must contain information about the
implementation of religious values (BPK, n.d.). This regulation is still general
in nature and represents a recommendation to keep the media and
entertainment industry steeped in religious elements. Therefore, it is very
important to enact specific laws for the Halal media and entertainment
industry (Reni et al., 2021).
Additionally, the absence of a MUI fatwa to regulate the Halal media
and entertainment industry in Indonesia is an issue that exacerbates the
development of this industry. Research on legal products in Indonesia's halal
media and entertainment industry has so far reached the stage of signing a
memorandum of understanding between KPI, MUI and the Ministry of
Religious Affairs (KPI, 2019). In fact, the MUI fatwa is an MUI decision
regarding the regulation of matters relating to the lives of Muslims in
Indonesia. Fatwas issued by Islamic governments have legal force to bind
Muslims in that country (Oseni, 2017). Therefore, the formulation of fatwas is
very important for the development of the Halal media and entertainment
industry in Indonesia.
| 63
F. Comprehensive Legal Framework for the Media and
Entertainment Industry in Indonesia
Even though Indonesia is ranked 5th according to the Global Islamic
Economic Index (GIEI), there is still a lot of work to be done to become the
center of the global halal industry, including the development of the halal
media and recreation industry. To create a sharia-compliant media
environment, a comprehensive legal framework needs to be developed by the
government and other stakeholders in the public sector (DinarStandard,
2022).
Based on the theory of "legal effectiveness" formulated by Anthony
Allott in 1981, regulations are considered effective if institutional laws are
enforced optimally. Law has three main functions: prevention, treatment, and
promotion. The preventive function means that the law must be able to
prevent unlawful acts committed by legal actors (Sup et al., 2020). On the
other hand, the therapeutic function of means that the law must be able to
provide adequate steps to resolve disputes that may arise. Facilitation means
that the law must be able to meet the various needs of legal entities in
implementing the law (Utami et al., 2021).
The regulatory framework for the halal media and recreation industry
in Indonesia is still far from the ideal framework based on Anthony Allot's
theory. This regulation has only been around for a year and currently only
focuses on traditional industrial settings. Therefore, Indonesia needs
regulations that specifically apply to the halal media and entertainment
industry (Mubarok & Imam, 2020). The most ideal legal framework to regulate
this industry is statutory regulations.
The enactment of the Law on the Halal Media and Entertainment
Industry will provide clear sanctions for industry players who violate it. Apart
from that, the DSN-MUI Fatwa must also be formulated as a law that binds
the ulama towards Muslims in Indonesia (BAPPENAS, 2019). Below is the ideal
regulatory structure for the halal media and entertainment industry in
Indonesia, developed by the author:

Table 1. Regulatory Framework for the Halal Media and
Entertainment Industry in Indonesia
Num Aspect Existing Regulations Ideal Regulation
1 Various a. Law Number 36 of 1999 a. Law on Halal
Regulations on Telecommunications; Telecommunications;
b. Law Number 40 of 1999 b. Law on Halal Press;
on the Press; c. Law on Halal
c. Law Number 19 of 2002 on Broadcasting;
Copyright; d. Law on Halal Films;
d. Law Number 32 of 2002 e. MUI DNS Fatwa on
on Broadcasting; Halal Media and
e. Law Number 33 of 2009 Entertainment
on Film; Industry.
f. Joint memorandum of
understanding between
KPI, MUI and the
Ministry of Religion.
2 Regulatory Kemenag, DPR, MUI, KPI DPR, Kemenag, MUI
Resources Kominfo, KNEKS, KPI
3 Types of There is not yet any regulated All types of businesses
Halal Media halal media in the Halal media and
That Have recreation industry that
Been are approved must be
Regulated regulated by the
government
4 Punishment Just a general punishment in Violations of rules in
for Violators conventional media halal media and
entertainment need to
be regulated clearly.
5 Licensing There is no licensing Halal For ease of
mechanism for halal media availability for media
and entertainment and entertainment
industry players,
licensing must be done
through the door.
6 Distribution There is no agreement yet Agreements regarding
of Authority, the allocation of powers
Coordination must be clear and must
and Synergy not overlap.
| 65
of
Competent
Authorities
7 Consumer There is no agreement yet The consumer
Complaints complaint mechanism
Mechanism must be clear and
carried out through
simple and direct
channels.
With a clear legal framework, we can build better halal media and
entertainment industry institutions, encourage the country's economic
growth, and maximize the existing potential to realize Indonesian dream of
becoming the center of the world Halal industry.

Chapter 7
HALAL CERTIFICATION
Bunga Mar’atushalihah, S.E., M.A, Della Delvia
A. History and Development of Certification in Indonesia

The Ministry of Health started halal labeling food goods in Indonesia
at the end of 1976, but the Indonesian Ulema Council (MUI) took over halal
certification in 1989. More specifically, as of November 10, 1976, food and
beverages that contained pig or its derivatives had to be labeled as such. The
Republic of Indonesia's Decree Number 280/Men.Kes/Per/XI/76, which
addresses the provisions for the distribution and marking of food containing
ingredients derived from pig, has regulations governing this. Food
manufacturers who utilize pork or its derivatives are required to put a warning
label printed or attached to the packaging on the container or package.
The warning notice must have two components: a red-colored image
of a pig and the words "CONTAINS PIG," which are shown in a red square box
just as in the image.
| 67
Figure 1
At that time, choosing the haram label was considered more effective
than giving it halal label because it is suspected that only a small portion of
products contain the element pig. So you only need to give a label to a few
products obviously contains pork. In order to speed up publication, Minister
Health collaborates with the Food and Beverage Entrepreneurs Association
throughout Indonesia (GAPMMI) to distribute the label to companies in need.
Ten years later, on August 12, 1985, the label was changed, which originally
had the label "CONTAINS PORK" and was finally replaced with a label that
said "HALAL". The government published two decrees, Nos.
42/Men.Kes/SKB/VIII/1985 and 68 of 1985, that addressed the insertion of
halal wording on food labels. These decrees were issued by the Ministers of
Health and Religion. After the maker notifies the Ministry of Health (MOH)
of the material composition and product processing techniques, labels might
be added. The Food Registration Assessment Team of the Directorate General
of Drug and Food Control, Ministry of Health, is used to conduct combined
supervision by the Department of Religion and the Department of Health.
A Cooperation Charter was signed on June 21, 1996, by the Ministry of
Religion, the Ministry of Health, and MUI, bringing respective regulations
about the use of the halal symbol on food into alignment. Minister of Health
Decree Number 82/Menkes/SK/I/1996 was amended by the Ministry of Health
with Decree Number 924/Menkes/SK/VIII/1996. The halal label was first
applied based on incomplete information about the component composition
provided by the manufacturer. A company may use the halal label if it certifies
that none of the ingredients in its goods are non-halal. It is believed that this
policy is ineffectual in guaranteeing the halalness of the items. The labeling
flow was altered with the release of Decree Number
924/Menkes/SK/VIII/1996. Based on a fatwa given by the MUI Fatwa
Commission, a company must first receive approval from the Directorate
General of Drug and Food Control (Dirjen POM) before writing a halal label
on its products.

After the product has been certified and it has been established that it
includes no non-halal ingredients, the MUI will issue a halal certificate. MUI
solely offers advice on how to write the halal certificate number and include
the official MUI halal emblem. In the meanwhile, BPOM RI has the right to
regulate the use of the halal logo provided a halal certificate is attached at the
time of application. The Food and Drug Supervisory Agency (BPOM) replaced
the POM Director General in 2000, and with it, the labeling of halal products.
Figure 2
The process for labeling packages with halal information is outlined in

Republic of Indonesia Government Regulation Number 69 of 1999 concerning
Food Labels and Advertisements. An approved inspection agency must
inspect the package first, in accordance with the protocols and norms set forth
by the Minister of Religion.
Food labels are documents that are affixed to or inserted into the
packaging that provide information on the food. They may be written,
illustrated, or a combination of the two. Decrees of the Minister of Religion
(KMA) 518 of 2001 and KMA 519 of 2001 were issued to monitor these
provisions. They specified that the Minister of Religion designated MUI as an
institution responsible for conducting inspections, processing applications,
and determining halal certification. In the meantime, MUI works with BPOM
to implement the halal logo on packaging. (Faridah, 2019).
On March 1 2022, the Ministry of Religion released the latest halal label
which must be included on all packaging. The Decree of the Head of the Halal
Product Guarantee Organizing Agency Number 40 of 2022 concerning the
Determination of Halal Labels serves as the basis for this modification. The
latest label is in the form of a logogram in the form of a mountain of puppets
with a purple surjan motif. The bottom of the label says "Halal Indonesia",
clean from ujub, riya and so on. (to the right of the new halal logo and to the
left of the old halal logo).
| 69
Figure 3
The Ministry of Religion provides leeway for manufacturers to use up

packaging stock with the old halal logo first. Only after that, the halal label on
the packaging must adapt to the latest one. After that, business actors must
immediately adjust the inclusion of the halal label on their products in
accordance with the provisions in the Decree of the Head of BPJPH Number
40 of 2022. This policy is clearly very helpful for producers or entrepreneurs
in entering the transition period from the old halal label to the new halal label,
which is clear, in the future. The use of the old MUI halal label is no longer
used and is no longer valid.
BPJPH Secretary Muhammad Arfi Hatim explained that the
Indonesian Halal label applies nationally. This marking also indicates that a
product has a halal certificate from BPJPH and is certified to be halal.
Consequently, the Indonesian Halal mark must be present on product
packaging, specific product components, and/or specific product locations. A
halal label on a product must be simple for customers or the general public to
see and understand as a means of identifying its halal status. Furthermore, it
is made sure that the halal label is applied legally and that it is difficult to
remove or damage.
The validity period of halal certificates based on regulations regarding
halal certification that is currently in effect has changed, which was previously
valid for 2 (two) years after being stipulated has changed to 4 (four) years.
According to Law Number 33 of 2014 respecting Halal Product Guarantees
(UU JPH) Article 42, "halal certificates are valid for four years from the time
they are issued by BPJPH, unless there is a change in the composition of the
ingredients." is how long a halal certificate is valid. Law Number 11 of 2020
Concerning Job also makes reference to this.
The establishment of Government Regulation Number 31 of 2019 with
regard to JPH Organizers. Having a halal label provides peace of mind for
consumers because the product is guaranteed to be halal. Consumer interest

in a variety of products, particularly food and beverage products, has been
demonstrated to increase when a product bears the halal label.
In Islamic law, the issue of halal certification and labeling is a topic
new one that has never been explained clearly in the texts or classical
jurisprudence books. Mention and discussion of food is placed in a special
chapter, chapter al-at'imah (food). On the other hand, processed foods what
is emerging and developing at this time is not detailed. On the other hand,
the various challenges that arise from the existence of science, technology and
industry in this modern era, affect all layers of the social structure, bringing
about socio-cultural changes and transformations in various forms and
variations. In addressing this issue, Islamic law must also provide legal
interpretation and certainty regarding various issues in the food sector.
According to information from the Ministry of Home Affairs
(Kemendagri), there were 241.7 million Muslims living in Indonesia as of
December 31, 2022. This figure represents 87.02% of the nation's population,
which was recorded at 277.75 million. Compared to the same period last year,
when there were 273.32 million people, this number climbed by 4.43 million
(quoted from https://dukcapil. kemendagri.go.id/). This results in a
comparatively high demand for halal goods. One nation that takes care to
guarantee religion and worship for all of its citizens is Indonesia. Article 29,
paragraph 2, 1945 Constitution, "The State guarantees the freedom of every
resident to embrace their own religion and to worship according to their
religion and beliefs," is consistent with this stance. (Republic of Indonesia
Law, 1945).
The freedom to practice any religion one chooses is implied by the
provision of religious freedom. In the meantime, the freedom to practice
worship in accordance with Shari'a is the guarantee of worship. Halal products
are a must for Muslims due to their religious convictions. In this instance,
safeguarding and ensuring halal goods for the Muslim populace falls under
the purview of the government. Where halal products are products that will
provide peace of mind for every individual who uses them. In Indonesia, the
manufacture of halal goods may be significantly impacted by the halal
movement. In the current era, halal products are products that are highly
sought after by consumers. A need that must be fulfilled in the consumption
of every people, especially Muslim ethnic groups, making halal products a
halal aspect of what is offered. The intensity that has resulted from the
production of halal products has increased, due to the high demand for halal
| 71
products, thus encouraging high demand from consumers (Munawiroh &
Rumawi, 2021).
B. Definition Halal Certification

All regulations or laws in Indonesia that regulate halal product
guarantees are based on sources of Islamic law, namely the Koran and Hadith.
As Allah said
ْ‫ن اِّنَّهْ لَ ُك ْْم َعدُوْ ُّم ِّبيْن‬ َّ ‫ت ال‬
ِّْ ‫شيْط‬ ُ ‫ْل تَتَّ ِّبعُ ْوا ُخ‬
ِّْ ‫طو‬ َ ْ‫ض َحلل‬
ْ َ ‫ط ِّيباْ َّو‬ َْ ‫ى‬
ْ ِّ ‫اْل ْر‬ ُْ َّ‫يٰٓاَيُّ َها الن‬
ْ ِّ‫اس ُكلُ ْوا مِّ َّما ف‬
Meaning: “O people, eat what is halal and good from what is found on
earth, and do not follow the steps of the devil, because indeed the devil is a
clear enemy for you.”
Apart from that, there is a hadith which serves as a guide for the ulama
in determining the basis for halal consumption that provides certainty that the
food to be consumed must comply with halal provisions or is definitely
prohibited for consumption, in other words it is very clear that it is haram,
Rasulullah SAW said:
‫للا‬
ِّْ ‫ل‬ َْ ‫سو‬ ُ ‫س ِّم ْعتُْ َر‬ َ :‫ل‬ َْ ‫للاُ َع ْن ُه َما قَا‬ ْ ‫ي‬ َْ ‫ض‬ ِّ ‫ْن َب ِّشيْرْ َر‬ ِّْ ‫ان ب‬ ِّْ ‫للا ال ُّن ْع َم‬ ِّْ ‫ع ْب ِّْد‬َ ‫ي‬ ْْ ‫ن أ َ ِّب‬ ِّْ ‫ع‬َ
‫ َو َب ْي َن ُه َما‬،‫ام َب ِّين‬ ْ
َْ ‫ن ال َح َر‬ َّْ ‫ل َب ِّينْ َو ِّإ‬ َْ َ‫ن ال َحل‬ ْ َّْ ‫ ِّإ‬: (( ‫ل‬ ُْ ‫سل َْم َيقُو‬َّ َ ‫ع َل ْي ِّْه َو‬ َ ُ‫للا‬
ْ ‫صلى‬ َّ َ
َ ‫ت فَقَ ِّْد ا ْستَب َْرْأ‬ ِّْ ‫شبُ َها‬ ُّ ‫ن اتَّقَى ال‬ ِّْ ‫ َف َم‬،‫اس‬ ِّ ‫ن َك ِّثيرْ ِّمنَْ ال َّن‬ َّْ ‫ ْلَْ َي ْعلَ ُم ُه‬،‫أ ُ ُم ْورْ ُم ْشتَ ِّب َهات‬
َْ ‫الرا ِّعي َي ْر َعى َح ْو‬
‫ل‬ َّ ‫ام َك‬ ِّْ ‫ت َوقَ َْع ِّفي ْال َح َر‬ ِّْ ‫شبُ َها‬ ُّ ‫ن َوقَ َْع ِّفي ال‬ ْْ ‫ َو َم‬،‫ض ِّه‬ ِّ ‫ِّلدِّي ِّن ِّْه َو ِّع ْر‬
ِّْ ‫ن ِّح َمى‬
‫للا‬ َّْ ‫ أَْلَْ َْو ِّإ‬،‫ل َم ِّلكْ ِّحمى‬ ِّْ ‫ن ِّل ُك‬ َّْ ‫ْلَ َو ِّإ‬ ْ َ ‫ أ‬،‫ن َي ْرتَ َْع ِّفي ِّه‬ ْْ َ ‫ْال ِّح َمى يُو ِّشكُْ أ‬
ْْ َ‫سد‬
‫ت‬ َ َ‫ َو ِّإذَا ف‬،ُ‫س ْدُ ُكلُّه‬ َ ‫ح ْال َج‬ َْ َ‫صل‬
َ ‫ت‬ ْْ ‫صلَ َح‬ َ ‫ضغَةْ ِّإذَا‬ ْ ‫س ِّْد ُم‬ َ ‫ن ِّفي ْال َج‬ َّْ ‫ أَْلَْ َو ِّإ‬،ُ‫ار ُمه‬ ِّ ‫َم َح‬
‫ وهذا لفظ مسلم‬،‫))رواه البخاري ومسلم‬. ‫ب‬ ُْ ‫ي ْالقَ ْل‬ َْ ‫ْلَ َو ِّه‬ ْ َ ‫س ْدُ ُكلُّ ْهُ أ‬َ ‫س ْدَ ْال َج‬ َ َ‫ف‬.
Diraُ ubAُ ‘From Abu Abdillah Nu'man bin Bashir Radhiyallahu
anhuma said: I heard Rasulullah Sallallahu 'alaihi wa sallam say: "Indeed what
is halal is clear and what is haram is also clear. Meanwhile in among them
there are doubtful (ambiguous) matters that most people do not know His
(laws). Whoever avoids doubtful matters (ambiguous), and then he has
cleansed his religion and honor. Whoever falls into a vague matter, then he
has fall into illegal things. Like the shepherds who are nearby a prohibitive
fence (belonging to a person) and it is feared that he will enter it. Know that
every king has prohibitions (laws). Remember that what Allah has forbidden
is what He has forbidden. Know that in the human body there is a lump of

flesh. If it's good, then it's good his entire body; and if it is damaged, then the
whole body is also damaged. Know that that lump of flesh is the heart.
(Narrated by at Bukhari and Muslim, and this is Muslim's lafazh)
The hadith above emphasizes that everything that is halal and
haram is clear, but beyond that there is also a lot that is still vague and unclear
which many people are unable to know. So, with laws or regulations made
regarding halal product guarantees, such as ownership of a halal certificate,
to provide certainty regarding something whose product halal status is
unclear or syubhat (Rahayu & Yusup, 2022).
As a halal guarantee for customers, halal certification is a business
ethic that manufacturers should follow. In addition to providing customers
with a guarantee that the product is halal, the halal label offers producers
financial advantages such as:
1. Can boost customer confidence due to its halal guarantee.
2. Possess a Unique Selling Point (USP).
3. Capable of breaking into the world halal market.
4. Make the product more marketable in the marketplace.
5. Low investment cost in relation to potential income growth.
The purpose of halal certification is to provide customers peace of
mind, but it also benefits business players. Certification of halal food is
becoming more and more important, particularly in light of global markets
and economic globalization. For all customers, but especially for Muslims,
halal products are a must. Given Indonesia's sizable Muslim population, a
sizable Muslim consumer market has organically grown inside the country. As
a result, ensuring halal products is crucial (Nurani et al., 2020).
The process of obtaining a halal certificate through multiple
inspection stages to demonstrate that the materials, production method, and
halal assurance system satisfy the requirements of the Food, Medicine, and
Cosmetics Assessment Institute (LPPOM MUI) of the Indonesian Ulema
Council is known as halal certification. The purpose of halal certification is to
guarantee a product's halal status in order to uphold consumer rights. The
quantity that consumers buy a product will depend on how certain they are
that it is halal. Producers had to apply voluntarily for halal certification in the
past. However, producers now have to apply for halal certification with the
introduction of Law of the Republic of Indonesia Number 33 of 2014
concerning Halal Product Guarantees (UU JPH). Article 4 of Law No. 33 of
2014, 2014, which stipulates that "Products entering, circulating and traded in
| 73
Indonesian territory must be halal certified," contains the regulations
pertaining to the necessary halal certification for all items. Regarding the law
itself, it will become required for all items in Indonesia to be certified halal
within the next five years of its enactment. This indicates that the rule
requiring all products, including food products, to be halal certified would be
put into effect in 2019 (Nurani et al., 2020)
Halal Product Guarantee (JPH) is a legal view regarding the validity of
a product. Halal is the main requirement for Muslim consumers when
purchasing meat, cosmetics or other foods. The quality of food products is
determined by the process, starting from raw materials, and transportation
from the factory to the final product reaching the customer's hands. Halal
products currently have a large market share and continue to grow. This is
due to the growth of the Muslim population which is estimated to reach 2.2
million in 2020, and the dominance of the Asia Pacific market in 2016 with a
consumer base of USD 594 million in several countries, including Bangladesh,
India, Pakistan, Indonesia and Bangladesh, as well as high Muslim population.
(Nadya et al., 2023).
C. Benefits of Halal Certification

Globally, halal cuisine is growing in popularity since it benefits both
Muslims and non-Muslims alike because it is certified halal according to strict
health and fitness guidelines. The invasion of imported food poses a
significant difficulty, particularly in Indonesia, where the majority of the
population is Muslim. Other nations will find it difficult to attract consumers
in order to generate revenue for their industries. (Salam & Makhtum, 2022).
In relation to Indonesian society, which is predominantly Muslim, having a
halal label is very important and has benefits, one of which is to keep us away
from haram food which is clearly prohibited by Allah SWT. Meanwhile, the
benefits of halal certification for companies include:
1. Increasing consumer trust. The first benefit of halal certification for
products for producers is increasing consumer trust in the product. It has
become a habit for most consumers to choose halal products. Having a halal
label listed on your product packaging can give consumers confidence in
buying your product. Because with the halal label, consumers don't need to
worry about the ingredients in the product.
2. Turnover increases along with increasing consumer confidence in products.
Then sales turnover will automatically increase. This is very useful for the

continuity of product production. Apart from that, with increasing
consumer confidence, you can expand your product reach.
3. Being able to expand market share to Muslim countries. Consumer trust is
quite good, which has increased the market reach of your product in
society. Your product will become increasingly known and become the
choice of the wider community. With this, your product has the
opportunity to spread its wings by exporting to several countries. Your
goods will be readily accepted in nations where the majority of people are
Muslims if it has halal certification. Your product sales turnover will be
significantly impacted by expanding your product markets overseas. As a
result, a product's halal certification mark is crucial. However, getting halal
certification is not as easy as we imagine. To obtain halal certification, an
application is required to the relevant institution. When submitting the
product, producers must follow the application procedures and fulfill the
requirements. Sometimes the process is a little complicated, making most
producers indifferent to halal certification.
4. The product has a unique selling point (USP). Having a USP compared to
competing products is a competitive advantage that makes the product
more valuable in the eyes of consumers. Goods that already bear the halal
emblem on their packaging have a USP that makes them stand out from
the competition and project a favorable impression on customers.
5. Gain Global Market Access. International standards and standard quality
are necessary for halal standard products to acquire the trust of consumers
worldwide. They should be an essential and inseparable aspect of global
trade and economic processes. This facilitates the movement of capital,
information, goods, and services between nations. The economies of these
nations are greatly impacted by international commerce, which can foster
an environment that makes reciprocal trade advantageous and increases
the efficiency of manufacturing and selling goods. Numerous academics
have come to the conclusion that the advantages of international trade
exceed those of military competition and territorial expansion. Products
that have halal certification will have the opportunity to market their
products in other Muslim countries besides Indonesia, by getting a Halal
certificate, of course you will get access to a wide global market.
Ultimately, obtaining a Halal certification can be considered a kind of
devotion for business owners, particularly Muslims. The obligation to follow
halal standards is the obligation of every Muslim. By carrying out halal
certification, the company has worshiped and obeyed the commands of Allah
| 75
and His Messenger and helped other people to obey the orders of Allah and
His Messenger to follow the rules (Tahliani, 2023).
D.Halal Certification and Halal Product Guarantee

The Institute Food, Drug and Cosmetic Assessment (LPPOM-MUI)
issues halal certifications, which attest to a product's compliance with Islamic
law. You can create halal labels with this halal certificate. The purpose of Law
No. 33 of 2014 respecting Halal Product Guarantees is to allay public worries
by laying forth precise guidelines for the awarding of halal certificates. Based
on a formal halal fatwa granted by the MUI, the Halal Certificate is a means
by which the BPJPH certifies that a product is halal.
In the meantime, a product's halal status is indicated by its halal label.
Businesses that hold a halal certificate must apply a halal label on their goods
using the halal label form that is relevant to their country. One of the several
advantages of halal certification for customers is the assurance of product
safety and guarantee. Of course, this is what every customer wants.
Moreover, Muslim consumers are commanded by Allah to consume
halal thayiban products. Halal certification affects producers' chances of
succeeding in the global market since it gives their goods an advantage over
other competitors. Consumer trust will be easier to obtain if the product has
halal certification, because of course a product that is halal certified is a safe
and secure product.
Indonesian rules pertaining to halal products include the following:
1. (Law) no. 33 of 2014 concerning Halal Product Guarantees (Peraturan
Pemerintah Republik Indonesia, 2014).
2. Government (PP) No. 31 of 2019 concerning Implementing Regulations of
Law 2 No. 33 of 2014 (JPH Law).
3. Regulation of the Minister of Religion No. 26 of 2019 on Maintenance Halal
Product Guarantee (Indonesia, n.d.).
4. Decree of the Minister of Religion (KMA) No. 982 of 2019 concerning Halal
Certification Services.
5. Government Regulation (PP) no. 39 of 2021 concerning the Implementation
of Halal Product Guarantee Sector (President of The Republic of Indonesia,
2021).
6. Decree of the Minister of Religion of the Republic of Indonesia No. 1360 of
2021 Materials Excluded from Halal Certification Obligations (Pemerintah
Indonesia, n.d.).

7. Republic of Indonesia Presidential Regulation No. 6 of 2023 - Halal
Certification of Medicines, Biological Products and Medical Devices
(Pemerintah Indonesia, 2023).
Three parties are involved in halal certification: BPJPH, MUI, and
LPPOM MUI, which serves as the halal inspection institution (LPH). BPJPH
offers assurances for halal products. In addition to scheduling and conducting
audits, LPPOM MUI also publishes audit memorandums, holds auditor
meetings, verifies the adequacy of documents, and provides minutes of audit
outcomes at MUI Fatwa Commission meetings. Based on the findings of
audits, the MUI, through the Fatwa Commission, establishes the halalness of
items and issues the MUI Halal Decree (Fuandi et al., 2022).
E. Production Facility Requirements and Documents for Halal

Certification
Production facilities used to produce goods with halal certification, or
alternatively used to produce products that are not submitted for halal
certification and are not derived from raw materials containing pork or its
derivatives. Therefore, business actors must pay attention to documentation:
1. Product name and kind.
2. List of goods and supplies utilized.
3. The procedure for developing new products.
4. Cleaning or reorganization of production facilities used cooperatively.
However, if the product produced uses ingredients derived from
and/or contains pork, then the business owner must identify the location,
time and equipment used in the production process by using the location,
time and equipment of the Supervisory Halal Companion (PPH).
Meanwhile, completeness of the requirements for halal meat
inspection documents as determined by the Halal Guarantee Organizing
Product Agency (BPJPH) includes:
1. Application letter (format determined by BPJPH).
2. Registration form (format determined by BPJPH).
3. Legal aspects (Business Identification Number) or business license and the
like Halal supervisor documents in the form of: KTP, decision to determine
halal supervisor, curriculum vitae, training certificate and/or halal
supervisor competency (if any).
4. List of products and ingredients.
5. Production process flow.
| 77
6. Halal guarantee system document/halal product guarantee system (format
determined by BPJPH).
7. Copy of halal certificate (for renewal registration).
8. Other documents (Example: Distribution permit documents from relevant
agencies) (Puspita Ningrum, 2022).
F. Halal Certification Registration Process

Based on Law no. 33 of 2014 concerning Halal Product Guarantees, the
halal certification process takes 21 working days. Registration for halal
certification can be done online at https://ptsp.halal.go.id/. The following is
the flow of the halal certification process, namely:
1. Business actors apply for halal certification (documents from the halal
product network system, business behavior data, product name and type,
list of items and components needed for usage, product processing, and
other complementary papers).
2. The Halal Product Guarantee Organizing Agency (BPJPH) selects a halal
inspector after verifying that the documentation is complete (2 working
days).
3. Halal Inspection Institution checks and/or tests product halal (15 working
days).
4. Through a halal fatwa hearing, the Indonesian Ulema Council (MUI)
decides if a product is halal (3 working days).
5. Halal Product Guarantee Organizing Agency (BPJPH) issues halal
certification (1 working day) (Peraturan Pemerintah Republik Indonesia,
2014).
G. Halal Certification Processing Fees

The cost of halal certification includes several stages which include:
1. Halal certification consists of:
a. Submission of application for halal certification fees.
b. Halal product inspection and/or testing costs.
c. Fair execution of halal fatwa trials.
d. Halal certification by third party.
e. Two-way registration for State halal certification.
2. Halal certification costs are borne by business actors who apply for a Halal
Certificate.
3. The rate of halal certification fees is determined in accordance with
statutory provisions (Puspita Ningrum, 2022).

CONCLUSION
of religious background, the world has witnessed the growth
potential of Halal Economy. The concept of halal is no longer just limited to
the food sector but has reached various other sectors such as the fashion
industry, pharmaceuticals, cosmetics, tourism, media and entertainment both
muslim and non-muslim. There is also the development of the Islamic
financial industry and the existence of halal certification. Increased awareness
and product quality are the main reasons behind the development of the halal
industry.
The halal industry has now evolved from food products to a holistic
halal concept that encompasses all values that have commercial value. It has
become a global symbol of quality assurance as well as lifestyle choices for
muslims and non-muslims alike. Halal products are gaining wider recognition
not only because they meet the requirements of sharia, but also aspects of
hygiene, sanitation and safety. Currently halal is a global trend, many
countries are competing to become the center of the world’s halal industry.
The concept of the halal industry in global trade is that the halal context is
not only limited to consumption, but also the entire production process and
services connected in the supply chain. The halal industry must include all
lines of operation such as packaging, marketing, manufacturing, logistics,
supply, maintenance, slaughter, and various other activities from beginning
to end. Halal certification also provides assurance to all muslims that the
product complies with sharia law and for non-muslims that halal products are
quality products based on the concept of Halalan Toyyiban.
Each country has special institutions and regulations that deal
with halal certification of a product. Currently, the halal industry in global
trade has developed significantly in every muslim country, even in non-
| 79
muslim countries. The concept of Islamic values which is a fundamental
aspect in the halal industry is not only associated with products and services,
but also becomes a new style of human life. Therefore, the halal industry as a
new phenomenon of the world economy should be used as a new paradigm,
especially in world production and consumption practices.

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iv | Understanding Concept Of Halal Industry

viii | Understanding Concept Of Halal Industry

A. Development of Sharia Finance Industry

Figure 2. Overview of ShariaBanking Industry Worldwide

The breakdown of global Shariabanking assets worldwide in

2 | Understanding Concept Of Halal Industry

Figure 2: Understanding the concept of sustainability

B. Types Of Sharia Finance Industry

4 | Understanding Concept Of Halal Industry

Shariah Rural Credit Bank (BPRS)

Non-Bank Sharia Financial Industry

6 | Understanding Concept Of Halal Industry

8 | Understanding Concept Of Halal Industry

C. The Existence of the Sharia Financial Industry as an Actor in

10 | Understanding Concept Of Halal Industry

A. Development of Halal Food and Beverage Industry

12 | Understanding Concept Of Halal Industry

B. Understanding Halal in the Food and Beverage Industry

C. Halal Regulations and Certification

14 | Understanding Concept Of Halal Industry

D.Challenges in Producing Halal Food and Bavarage Industry

16 | Understanding Concept Of Halal Industry

E. The Importance of the Halal Food and Beverage Industry in

F. Latest Innovations and Developments in the Halal Food and

18 | Understanding Concept Of Halal Industry

20 | Understanding Concept Of Halal Industry

B. Definition Halal Industry

22 | Understanding Concept Of Halal Industry

C. Challenges for the halal industry in Indonesia

1. Indonesia's halal potential has not been optimized because Indonesia is

D.Development of the Halal Industry in Indonesia

The development of the sharia economy has shown positive

24 | Understanding Concept Of Halal Industry

26 | Understanding Concept Of Halal Industry

Things related to halal fashion include:

28 | Understanding Concept Of Halal Industry

F. Fashion industry opportunities halal in Indonesia

30 | Understanding Concept Of Halal Industry

Main International Markets for Indonesian Clothing Exports in 2021

Graph 1.3: Total Population of Indonesia by Religion, 2010-2050

As many as 87% of Indonesia's population is Muslim. It even has the

32 | Understanding Concept Of Halal Industry

34 | Understanding Concept Of Halal Industry

36 | Understanding Concept Of Halal Industry

A. Definition of Pharmaceutical Industry

C. The Importance of the Halal Pharmaceutical Industry

40 | Understanding Concept Of Halal Industry

Figure 1. Number of Indonesian Population According to Religion 2022

Source: Directorate General of Population and Civil Registration

(Dukcapil) Ministry of Home Affairs

Figure 2. Comparison of Indonesia's Halal Sector with Other Countries

Source : State of the Global Islamic Economy Report – UAE

Regarding this matter, both the government, the pharmaceutical

D.Growth of the Halal Pharmaceutical Industry in Indonesia

42 | Understanding Concept Of Halal Industry

E. Challenges of the Halal Pharmaceutical Industry

44 | Understanding Concept Of Halal Industry