Indonesia’s rising dominance across halal textiles

Indonesia has taken its place in the sun and is poised to lead the halal textile market.

The Southeast Asian country with a Muslim population of roughly 242 million, is set to enforce mandatory halal certification for clothing in 2026. This regulation marks a significant transformation for Indonesia’s fashion sector, according to Ahmad Soffian, CEO and co-founder of Sa’adah Global, a Jakarta-based halal business consultancy.

“For textile manufacturers, this regulation will likely drive increased demand for investment in specific areas, especially in certification processes, new machinery, and dedicated production lines that ensure halal compliance.”  

The global halal textile market is set for sustained expansion, on the back of increasing demand for ethical and modest fashion, rising awareness of halal principles, and a growing global Muslim population.

Muslim spending on fashion was valued at $318 billion in 2022, reflecting an 8.4% increase from the previous year, and is projected to grow at a compound annual growth rate (CAGR) of 6.1%, reaching $428 billion by 2027, according to the State of the Global Islamic Economy 2023/24 report. 

Beyond meeting religious requirements, halal textiles align with environmentally friendly and cruelty-free production practices, which help enhance their appeal to a broader, ethically conscious audience, including non-Muslims. This duo of reasoning positions halal textiles as a cornerstone of both modest fashion and sustainable innovation in the global textile industry.

However, local manufacturers in Indonesia will need to ensure that their supply chains - from raw materials to the final product - align with halal standards to avoid operational disruptions, Soffian emphasizes.

While the regulation may impose initial financial challenges, particularly for smaller brands and manufacturers due to the costs of certification and supply chain adjustments, it also presents a strategic opportunity. 

“By aligning with halal standards, local businesses can appeal to the growing demand for halal and modest fashion globally, significantly broadening their market reach,” notes Soffian. 

In the long term, this regulation positions Indonesian brands to strengthen their presence in the global halal market. 

Zoya, an Indonesian hijab brand, has leveraged its halal certification from the Indonesian Ulema Council (MUI) to enhance consumer trust and boost purchasing decisions. 

According to research published in the Academic Journal of Islamic Studies, the halal label, combined with strategic celebrity endorsements in advertising, significantly influenced consumer confidence in the quality and authenticity of Zoya's hijab products.

Another notable player in the halal textile industry is KainHalal, a brand by PT MilangKori Persada. In 2021, KainHalal became the world’s first halal-certified textile manufacturer, marking a milestone for Indonesia’s Halal Product Assurance Organizing Agency (BPJPH) under the Ministry of Religious Affairs. 

The certification process emphasized traceability, ensuring compliance from raw material sourcing - such as yarn and chemical ingredients - to production stages like bleaching, smoothening, and finishing. To achieve this distinction, PT MilangKori Persada collaborated with Asahi Kasei’s Bemberg, the world’s sole producer of cupro fiber. 

This eco-friendly cellulosic fiber, derived from cotton linters, is produced in a centralized facility in Japan, simplifying the rigorous tracking and tracing required by MUI. The company also worked with the Indonesian Textile Expert Association (IKATSI) to ensure adherence to the 11 Halal Assurance System criteria for factory operations.

KainHalal expanded its influence by collaborating with seven fashion designers this year to showcase Indonesia’s modest clothing at fashion weeks across London, Milan, and Paris. 

“We showcased our creations, primarily made with natural dyes and eco-print techniques, to align with halal textile principles. By 2025, we hope to create synergies with artisans specializing in traditional handicrafts like batik, ikat, songket, and lurik,” Fitriani Kuroda, president director of PT MilangKori Persada and CEO and founder of KainHalal, told Salaam Gateway.

KainHalal’s halal-certified woven fabrics have gained particular recognition for their practicality during Umrah and Hajj pilgrimages. The fabrics are breathable, resistant to wrinkles, and quick drying, making them ideal for travel. Additionally, the material offers qualities similar to silk, providing an alternative for Muslim men who avoid silk due to religious considerations.

Kuroda believes that Indonesia’s upcoming halal certification for clothing will unlock significant opportunities for the fashion industry. 

“Halal certification not only ensures traceability, but it also encourages the certification of various related products, such as dyes, finishing agents, and fabric softeners, thereby strengthening the halal textile ecosystem,” Kuroda explains.

This ecosystem, she adds, will help position Indonesia’s modest fashion industry as a global leader, aligning with the government’s vision of making the country the Muslim fashion capital of the world. 

The SGIE 2023/2024 report highlights Indonesia's pivotal role in modest fashion, ranking the country as the third-largest contributor to the global modest fashion ecosystem, following Türkiye and Malaysia. 

Industry first movers

Globally, several companies are emerging as pioneers in the halal textile industry, helping meet the growing demand for products that align with Islamic principles.

“Within Indonesia, brands like Shafira Corporation and Zoya have made notable strides in integrating halal compliance in their clothing lines, resonating with consumers who prioritize both modesty and religious adherence,” notes Soffian.

On an international level, British consumer goods giant Unilever and German chemical giant BASF are contributing to the halal textile value chain through halal-certified chemical processing, including the production of certified dyes and other critical textile chemicals, he adds. 

These efforts strengthen the foundation for halal compliance across various stages of textile manufacturing.

In addition, Toray Industries in Japan and Al Khayyat Investments in the UAE are aligning their textile materials with halal standards to cater to the expectations of Muslim consumers worldwide, according to Soffian. 

“These brands are paving the way by emphasizing transparency, halal certification, and dedicated production lines, setting benchmarks for the industry as halal textiles continue to grow in demand.”