While Vietnam–Malaysia trade has grown briskly, Vietnamese exports remain modest; the Halal market is seen as viable headroom for Vietnamese goods to expand their presence in this market.

Rapidly expanding trade, ample headroom for Vietnamese exports

Malaysia is one of Vietnam's key trade partners within ASEAN as well as globally. The 2015–2025 period recorded notable expansion in bilateral trade turnover. From USD 7.4 billion in 2015, total two-way trade between the two nations more than doubled to reach USD 16.33 billion in 2025.

This momentum has carried forward into 2026. In the first six months of the year alone, Vietnam–Malaysia trade turnover touched USD 10.8 billion, with Vietnam exporting USD 3.4 billion and importing USD 7.4 billion. On the back of these results, total bilateral trade turnover in 2026 is projected to surpass the USD 18 billion milestone for the first time.

However, in media interviews, Phung Van Thanh, Vietnamese Trade Counselor in Malaysia, pointed out that Vietnam’s exports to Malaysia have lagged behind the growth of imports.

In 2015, Vietnam exported USD 3.58 billion worth of goods to Malaysia; a decade later, this figure had risen to just USD 5.33 billion, representing an average annual growth rate of 3.89%. Conversely, imports from Malaysia accelerated far faster, climbing at an average annual pace of 11.48% over the 2015–2025 period.

Phung Van Thanh also noted that a principal factor behind the sluggish export growth of Vietnamese goods into Malaysia involves non-tariff barriers tied to Halal compliance. Food and beverage items shipped to Malaysia are generally required to satisfy strict Halal standards and secure formal certification, criteria that many Vietnamese products have yet to fulfill. As a result, the primary categories Vietnam successfully exports to Malaysia remain industrial goods, manufactured items, machinery, equipment, and industrial raw materials—product segments exempt from Halal certification mandates.

This dynamic demonstrates that significant headroom remains to broaden Vietnamese exports to Malaysia, particularly across agricultural produce, food, and beverages. Here, Halal compliance constitutes an essential prerequisite for market access.

Halal unlocks broader commercial avenues for Vietnamese goods

With a population of approximately 34.2 million, of which 60.4% are Muslim, Malaysia offers a sizable market for Halal goods. Beyond satisfying domestic consumption needs, Malaysia is positioning itself to develop into a premier trade hub for the broader Islamic world.

According to Phung Van Thanh, Malaysia currently ranks among the top five Halal food-importing nations within the Organisation of Islamic Cooperation (OIC), with annual Halal food imports exceeding USD 20 billion. The scale of Malaysia's domestic Halal food market is estimated at roughly USD 50 billion per year.

Furthermore, the Malaysian Government has ratified the Halal Industry Master Plan (HIMP), aiming to position Malaysia as a foremost leader in the global Halal economy, targeting domestic consumption of USD 113 billion by 2030. This strategy aligns with the vision of developing Malaysia into a Global Islamic Trade Hub.

“This is a massive opportunity that we must seize. If more Vietnamese products satisfy the necessary standards and attain Halal certification, exporting to Malaysia will proceed much more smoothly, thereby helping two-way trade between Vietnam and Malaysia rapidly achieve USD 20 billion and aim toward USD 25 billion annually,” Phung Van Thanh emphasized.

Accordingly, for Vietnamese merchandise, meeting Halal requirements can create favorable conditions to penetrate a major consumer base while leveraging Malaysia as a springboard to access the wider Islamic market. This also supports the bilateral trade target of USD 20 billion, progressing toward USD 25 billion per year.

In practice, Vietnam possesses favorable conditions to develop Halal products, ranking among the world's top 10 exporters of core agricultural staples such as rice, coffee, cashew nuts, pepper, deep-processed agro-commodities, and medicinal herbs. Notably, over 80% of Vietnam’s pure plant-origin produce inherently satisfies baseline Halal nature due to its natural composition, free from alcohol and prohibited derivatives.

While this represents a strong raw material advantage, transforming these inputs into Halal commercial goods capable of penetrating deep into Malaysia requires enterprises to overcome multiple operational hurdles.

Regarding these hurdles, Phung Van Thanh pointed first to limited institutional knowledge and experience in Halal product development. Halal standards are not fully harmonized across Islamic nations, and differences or competing criteria exist across national certification regimes. Enterprises, therefore, cannot simply adopt a single uniform standard and assume it applies universally.

In addition, there are constraints surrounding access to technical advisory services and product formulation experts, coupled with the steep costs of securing and maintaining certification. Vietnam currently has few assessment bodies possessing extensive experience and reciprocal recognition across major Islamic jurisdictions. Consequently, businesses must rely on foreign certification bodies, driving up procedural friction and expenses.

Attaining Halal certification is also a rigorous process. The Department of Islamic Development Malaysia (JAKIM) is the official certification authority. Enterprises must comply with strict criteria covering product quality, sanitization, and processing integrity. Following dossier submission, JAKIM auditors conduct direct physical site inspections of processing facilities to evaluate compliance.

Subsequent to the initial inspection, JAKIM may require the manufacturer to alter physical facilities or adjust processing lines to ensure conformity with Halal standards and conditions. For foreign enterprises, the audit process can also involve significant travel, logistical, and lodging expenses for overseas inspection teams.

Advancing Halal exports to Malaysia involves challenges extending beyond the paperwork of certification: it requires building structural Halal capabilities spanning raw material procurement, manufacturing protocols, supply chain controls, audit readiness, and ongoing recertification.

With the bilateral trade target between Vietnam and Malaysia set at USD 20 billion by 2030, diversifying export commodity baskets is essential. In this context, Halal products can evolve into a pivotal segment, opening doors for Vietnamese goods to venture further into global Islamic markets.

Source: Bao Cong Thuong