How Will BRICS Expansion Help the Global Halal Industry?

The rise of the BRICS nations (Brazil, Russia, India, China, and South Africa) in the global economic framework has been the subject of extensive analysis, particularly regarding how their collective growth might impact various sectors. One market poised for significant benefits is the global halal industry — a sector that caters to the needs of over 1.8 billion Muslims worldwide, adhering to Islamic law in food, finance, and lifestyle. As the BRICS bloc expands and strengthens economic ties, its influence on the global halal market is expected to grow in numerous ways.

Traditionally, the halal market has thrived in regions with significant Muslim populations, such as the Middle East, North Africa, and parts of Southeast Asia. However, the growing influence of BRICS economies is reshaping the landscape. Here’s a closer look at how these nations are shaping the future of the global halal industry.

Demographic Potential & Rising Demand

• Russia and India: Within the BRICS countries, Russia and India have substantial Muslim populations, accounting for around 15% and 14% of their populations, respectively. These sizable minorities create a strong domestic demand for halal products, laying the groundwork for growth in the local halal market. This domestic market also has the potential to become an export hub to other Muslim-majority regions, such as the Middle East and Southeast Asia.
• China: Home to over 20 million Muslims, China’s domestic halal market is booming. The country’s ‘Belt and Road Initiative’ (BRI) plays a strategic role by connecting China with Central Asia, the Middle East, and North Africa, creating significant opportunities for cross-border trade and partnerships in halal products.

Agribusiness & Halal Meat Trade

• Brazil: As the world’s leading exporter of halal meat, Brazil’s agribusiness industry is a major player in the global halal trade. The country has been investing heavily in halal certification and supply chain improvements, ensuring that its meat exports meet halal standards. Recent developments show that Brazil is expanding its reach beyond traditional Middle Eastern markets, with a focus on Southeast Asia and Africa to meet growing demand.

Technological Advancements & Investments

• China and India: With their prowess in technology and manufacturing, China and India are ideally positioned to lead advancements in halal supply chain technologies. The introduction of blockchain-based traceability, AI for quality control, and other innovations in food safety can ensure product integrity and ease the halal certification process. In addition, India has seen recent growth in halal startups and e-commerce platforms catering to both local and global Muslim consumers.
• South Africa: South Africa acts as a gateway to Africa’s burgeoning halal market, which is estimated to cater to over 500 million Muslims. By leveraging its strategic position, South Africa could facilitate the trade of halal products between African producers and the BRICS economies, tapping into new markets and establishing itself as a halal hub.

Halal Tourism & Cultural Integration

• China and Russia: The BRICS expansion includes a growing emphasis on tourism, and halal tourism is a segment experiencing a rapid surge. With increasing numbers of Muslim tourists visiting China and Russia, these countries are investing in halal-friendly services, from food to accommodation. Recent trends show the development of dedicated halal travel packages, halal-certified restaurants, prayer facilities, and cultural experiences designed to attract Muslim travelers.

Regulatory Harmonization & Standards

One of the critical challenges in the global halal market is the lack of standardized certification processes. The BRICS nations have the opportunity to foster regulatory cooperation, aligning halal standards and quality controls to facilitate smoother trade. Collaborative efforts are underway to create unified halal standards across BRICS countries, aiming to simplify cross-border certifications and reduce barriers to entry for halal businesses.

Financial Ecosystem & Islamic Finance

Islamic finance, closely linked to the halal industry, is gaining traction among BRICS nations. With South Africa issuing a sovereign sukuk (Islamic bond) and both Russia and China showing a growing interest in Islamic banking, the development of a financial ecosystem that supports halal trade is in progress. The BRICS’ expansion into Islamic finance provides opportunities for halal businesses to access capital and financing aligned with Shariah principles, supporting growth in sectors such as halal food production, real estate, and tourism.

Emerging Markets & New Trade Opportunities

The BRICS bloc is not only enhancing trade within its member states but also exploring new markets. With the potential expansion to include countries like Saudi Arabia, the UAE, and Egypt — nations with significant influence in the global halal industry — BRICS could become a major player in halal trade, fostering collaborations and enhancing market access for halal-certified products.

Challenges and Opportunities

While the prospects for BRICS in the halal market are promising, there are challenges to address:

• India`s Hatred Against Muslims & Halal: Successive Indian governments have significantly contributed to turning the majority Hindu population against the minority Muslim community. This trend could further marginalize and suppress the economic opportunities and livelihoods of Muslims in the country.
  
• Standardization and Certification: Establishing unified halal standards is a complex task, as different countries have varying interpretations and regulations regarding halal compliance.
• Geopolitical Dynamics: Global trade tensions, sanctions, and political shifts can impact halal trade routes and business relations.
• Cultural Awareness: Understanding the cultural nuances and religious practices of the global Muslim population is essential to cater to the halal market effectively.

Despite these challenges, the BRICS nations’ combined economic influence, demographic diversity, and commitment to cooperation provide a solid foundation for the halal industry’s growth. With strategic investments, regulatory reforms, and technological advancements, BRICS countries are well-positioned to be at the forefront of the global halal market.

The expansion of BRICS represents a significant opportunity for the global halal industry. As these nations continue to grow economically and strengthen trade ties, their influence on halal products, services, and finance will undoubtedly expand. By fostering partnerships, aligning standards, and embracing innovation, the BRICS countries have the potential to reshape the future of the halal market, promoting a more interconnected and thriving global halal economy.