Evaluation of the Trade Balance for Imported Cosmetic Chemical Additives (HS Code 3304) and Its Impact on the Growth Rate of the National Halal-Certified Cosmetic Industry

Abstract

The Indonesian cosmetic sector is undergoing a pivotal transition toward mandatory halal compliance; however, it remains structurally vulnerable due to its reliance on imported chemical additives under HS Code 3304. This study evaluates the trade balance of these essential ingredients and its subsequent influence on the expansion of the national halal-certified cosmetic industry between 2021 and 2024. Using longitudinal secondary data from Statistics Indonesia (BPS), the Halal Product Assurance Agency (BPJPH), and the Ministry of Industry, this study identifies a widening trade deficit with an average annual increase of 11.3%. A Pearson correlation analysis reveals a robust positive relationship () between import volumes and the issuance of new halal certificates, confirming that the industry’s growth is fundamentally import-driven. While the volume of halal-certified products continues to rise, the lack of upstream sovereignty exposes the sector to global supply chain volatility and potential halal integrity risks. These findings emphasize the urgent need for strategic government intervention, including fiscal incentives for domestic chemical manufacturing and enhanced research into local biodiversity-based additives, to transition from a mixing-based industry to a self-sufficient manufacturing power.