Indonesia is preparing to launch six new Special Economic Zones (SEZs), including a Halal SEZ in Sidoarjo, East Java, aimed at positioning the country as a global hub for halal industry. With rising demand for halal-certified products worldwide, the initiative reflects Indonesia’s strategic ambition to capture greater value in global supply chains. The plan awaits final approval from President Prabowo Subianto and has already attracted investor interest.
Key Facts & Background:
- Six new SEZs are proposed; one already approved (KITB Batang), leaving six pending presidential approval.
- The Halal SEZ in Sidoarjo is designed to serve as a global center for halal manufacturing and logistics.
- Indonesia aims to fill gaps in the halal supply chain, particularly in sectors like gelatin, which is often produced in China using non-halal inputs.
- The government seeks to redirect value-added processing to Indonesia before products reach Middle Eastern markets.
- Several investors have expressed interest in the Halal SEZ, including those in gelatin and derivative industries.
- Indonesia currently has 25 SEZs:
- 13 focused on industrial sectors
- 12 focused on services
- Cumulative SEZ investment as of H1 2025: Rp294.4 trillion
- H1 2025 investment realization: Rp40.48 trillion (48.2% of the Rp84.1 trillion annual target)
- Total employment generated by SEZs: 187,000 jobs
Strategic Insights: The establishment of a Halal SEZ in Sidoarjo reflects Indonesia’s intent to move beyond commodity exports and into high-value, ethical manufacturing. By targeting halal supply chains—particularly in sectors where production and consumption are geographically misaligned—Indonesia can capture untapped margins and assert leadership in a fast-growing global market. The gelatin example illustrates how strategic positioning can shift value creation from upstream producers to compliant processors closer to demand centers. This initiative also aligns with broader goals of industrial diversification, regional development, and Islamic economic diplomacy. If executed with robust infrastructure, certification standards, and investor incentives, the Halal SEZ could become a blueprint for integrating religious compliance with economic competitiveness. Over time, it may also strengthen Indonesia’s branding as a trusted source of halal goods, enhancing export potential and attracting foreign direct investment.