Economics of Halal
by Ramesh Shinde on 29 Sep 2022 2 Comments

Economics has a crucial role in the development of a nation. What happens if an economy is checkmated or partially controlled by extraneous, ideological issues that can impact its wholesome functioning? In recent decades, what has come to be dubbed as the “Halal Economy” has been rapidly invading the Indian manufacturing sector, impacting especially the export sector, on non-economic grounds. Indeed, it openly demands adherence to the norms of a specific religious ecosystem.


As this impacts the income of manufacturers and local traders, it is important to understand the functioning of the halal economy, and its ability to quietly undermine national institutions.


Halal is an Arabic term to denote things or practices considered valid and permissible in Islam; Haram means the opposite. Halal involves a specific way of killing an animal, that is common to Jews and Muslims, but not Christians and other people. Opposition to this manner of killing has been growing in Western countries, and in 2017, European countries such as Demark, The Netherlands, Sweden, Switzerland, Belgium and the UK banned halal as a method of killing animals for meat. In these countries, Muslims began to accept the meat of animals stunned before slaughter as halal. In India, halal is protected under the Cruelty to Animals Act, 1960.


As a specific method of obtaining meat for food, none would object to halal. However, halal intrudes almost every sector of the economy and impacts the lives of citizens, especially business and traders.


The rapid spread of halal meat shops has virtually driven the Khatik community, traditional Jhatka butchers and sellers, out of business, causing loss of lakhs of jobs nationwide. This happened as many Government-run, multinational and private companies (meat shops, hotels, eateries, food delivery businesses) began to promote Halal meat with Halal Certification. In the process, the meat shops run by the Khatik community faced extinction and began to be replaced by Halal meat shops.


A growing realisation that traditional jobs and skills are being lost in this manner has created a rising demand for Jhatka meat among Sikhs and Hindus. Sikhs are especially enjoined by their religious tenets to consume only jhatka meat, and other non-vegetarian groups are now availing of jhatka meat that is making a comeback in the market.


Halal has made deep inroads in the economy through the institutionalisation of the Halal certificate and logo. This involves paying a fee to an Islamic organisation to certify that the product being sold has been prepared in conformity with Islamic injunctions. It can be considered valid as far as meat products are concerned, as that is also the context in which the term appears in Islamic doctrine. But it has made inroads in all manufacturing, and acquired a status higher than the national certification agency, the Food Safety and Standards Authority of India (FSSAI).


The thought process behind halal products was farmer to consumer. Mr Rafe Haneef, Chief Executive Officer, HSBC Amanah, appealed to Muslims across the globe to make the entire business process, from product design to distribution, halal compliant in order to achieve the goal of a global halal economy. As a result, halal certified products became profitable and profits started to flow into the Islamic Bank in Malaysia. Later, this bank provided financial support to halal manufacturers. It proved to be a lucrative business and the bank’s assets grew substantially.


Later, the Organization of Islamic Cooperation (OIC) made it mandatory for exporters to get a halal certificate from an authorised Islamic organisation to export their products to Islamic countries. It became an additional expense on manufacturers and traders.




The FSSAI was established by the Ministry of Health & Family Welfare, Government of India, to certify the purity of food items. The State level Food and Drugs Administration (FDA) approves medicines before they are sold to patients. These agencies classify every food item as vegetarian or non-vegetarian based on its ingredients and the results of various scientific tests. They ensure that manufacturers publish the list of ingredients and their percentage for every product on their final packing.


FSSAI should also help customers recognise the product as vegetarian or non-vegetarian by printing either a green dot or a red/brown dot in one corner of the packaging. This practice is followed by food delivery establishments for the comfort and convenience of their customers.


On December 16, 2021, the Delhi High Court ruled that businesses should also publish the source of the ingredients used for preparing food items. This means that if gelatin used in chewing gum is derived from cattle or pigs, the concerned establishments will have to furnish this information on the chewing gum wrapper.


FSSAI conducts various tests and certifies food items as vegetarian or non-vegetarian. This raises the question that when there is a Government agency like FSSAI, how did private organisations enter into the Halal certification business, and collect fees to certify that no haram ingredient was used?


Moreover, each private body sets its own rules to issue Halal certificates. There is no standard practice followed. It seems that some Islamic countries consider the Halal certificates issued by the dominant sect in their country (Shia, Sunni, Deoband, etc.) as valid. However, Sharia Boards in other Islamic countries do not accept such certificates as valid. Products certified as halal in India are not considered halal-compliant in the UAE.


Experts surmise that at least 58% of the Hindu population are non-vegetarians. They have been buying meat without awareness of the absence of traditional butchers. Muslim adherence to community norms regarding Halal meat has helped to promote halal-compliant meat products.


Use of Funds


A study by the Middle East Forum in the US revealed that since 2012, the Islamic Food and Nutrition Council of America (IFANCA), a Halal certification body, had been providing financial support to Jamaat-e-Islamiyya, Hamas and Al-Qaeda, to carry out terrorist activities across the globe.


The 2013 annual report of the Islamic Council of Western Australia (ICWA) mentions that funds raised through Halal Certification were used to fund fundamentalist and terrorist organisations. ICWA had continuously given aid to Syria due to the prevailing civilian crisis, routed through Al-Imdaad Charity. The Al-Imdaad, a Syrian organisation, distributes funds to terrorist groups such as ISIS, Hamas, the banned Muslim Brotherhood, and others.


In India, Jamiat Ulema-e-Hind Halal Trust is the primary institution issuing Halal certificates. In December 2019, its Bengal state unit president, Siddiqullah Chowdhury, opposed the Citizenship Amendment Act and threatened that he would not allow Home Minister Amit Shah to land at Kolkata Airport. The trust provided legal aid to the fanatics who killed the Hindu leader, Kamlesh Tiwari.


Jamiat Ulema-e-Hind also provided legal aid to persons accused in the July 2006 Mumbai Railway bomb blast, 2006 Malegaon bomb blast, Pune’s German Bakery bomb blast, 2008 terrorist attack on Mumbai, the serial bomb blasts at Mumbai’s Zaveri Bazar, Delhi’s Jama Masjid bomb blast, Karnavati (Ahmedabad) bomb blast, and many other cases. It is currently fighting cases for about 700 accused, belonging to Lashkar-e-Taiba, Indian Mujahideen, Islamic State and other terrorist organisations.


Since halal certification provides a huge chunk of their finances, the Government of India must clarify the legality of this practice. There is no reason why the FSSAI cannot have a department for halal certification, where necessary, and this can be tweaked for specific needs of specific Islamic countries.


Within India, meat shops already advertise if they are halal or jhatka. At the same time, the need for certification of vegetarian foods that have no non-vegetarian ingredients requires clarification. As of now, it is an additional burden, a hidden tax, on the manufacturer, who is not compensated in terms of GST or any other relevant tax.


The author is national spokesperson, Hindu Janajagruti Samiti

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