Indonesia to establish halal Special Economic Zone (SEZ) among five others

Six new Special Economic Zones (SEZs) including the halal industry are underway to be established by the Indonesian government, who currently await approval from its President, Prabowo Subianto.

ANTARA reported that the SEZs will span Sidoarjo, East Java where it will serve as a hub for the global halal industry. 

The Indonesian Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso said initially there were seven proposed SEZs, but one of them - the Batang Industrial Special Economic Zone (KITB) - has been approved. 

“ Thus, there are six more remaining, one of which is the Halal SEZ. Hopefully, it will be approved soon," he said.

For the record, Indonesia currently operates 25 SEZs where 13 of them focus on industry while the remaining 12 on services. 

Indonesian Secretary of the Coordinating Ministry for Economic Affairs, Susiwijono Moegiarso (photo credit: ANTARA)

Moegiarso emphasised that the halal SEZ in Sidoarjo displays strong potential in assisting the country to become a major player in the global halal supply chain, which is currently dominated by other countries.

He cited the gelatin industry, for example, which is typically produced in China utilising pork by-products, while the demand is concentrated in the Middle East.

"We want to capture that share, to extract added value from products whose initial processing is done in China, but whose markets are in the Middle East. With the halal SEZ, we can capture the added value here," he said.

According to Moegiarso, the halal SEZ has attracted several investors, potentially investing in the gelatin sector and its derivatives particularly.

As of June 2025, total investment in SEZs had reached RM81.7 billion, employing around 187,000 people. 

In the first half of 2025 alone, SEZs absorbed RM10.36 billion in investment, equivalent to 48.2 percent of this year's RM2.15 billion target.