Halal Fashion Value Chain and Local Economic Empowerment: The Case of Pekalongan City, Indonesia

Abstract

The industrial sector has increasingly become a catalyst for economic transformation in
Indonesia, particularly as agricultural land conversion and labor shifts accelerate urban
industrialization. Within this process, the halal industry has emerged as a strategic field due to
the growing global demand for halal-certified products. Pekalongan City, historically recognized
for its textile and batik production, represents one of Indonesia’sleading creative hubs in halal
fashion. This study aims to analyze the structure of the halal fashion value chain and its socioeconomic implications for local communities in Pekalongan. Employing a qualitative approach
through literature review and field interviews, the research examines the positioning of
Pekalongan within the global halal fashion ecosystem. The findings reveal that Indonesia
remains a net importer in the global halal fashion trade, with the industry’s economic value
lagging behind the halal food and beverage sector. In Pekalongan, halal fashion activities are
concentrated on domestic markets, while export participation and certification adoption remain
limited. The study concludes that the halal fashion ecosystem in Pekalongan is still in its
formative stage and requires integrated support in value chain development, export facilitation,
and institutional coordination to enhance global competitiveness.