Investing In India’s Halal Market: The World’s Third Largest Muslim Consumer Base
India has the world’s third largest Muslim population at more than 170 million and presents huge market opportunities for halal-based entrepreneurs. One estimate puts the global Muslim market at US$7 trillion, with the halal food market valued at an estimated US$1.7 trillion and halal cosmetics US$75 billion.
What is halal?
Halal or ‘permitted’ in Arabic, defines the suitability of a particular product for consumption under Islamic law, the Shariah. Halal products should be compliant with guidelines for purity and hygiene and should not contain any derivatives of pork (which may be present in gelatin and emulsifiers) or alcohol. In the case of meat products, animals must be slaughtered according to procedures under Islamic law.
While the concept of halal is often associated with food, it is applicable to all kinds of consumer goods and services. The global halal economy consists of food products, cosmetics, banking and finance, travel, and pharmaceuticals, among others.
How a halal certification can help your business
A halal certification for your product, premise, restaurant, or business will assure customers that it is compliant with halal requirements.
The type of halal certification thus depends on the nature of the business. Halal certification bodies offer specific schemes that cover food, beverage, and catering, restaurants, industrial operations, abattoirs, warehouse / storage, and product endorsement, etc.
Halal certification in India is a popular requirement among export-oriented businesses, especially if they sell to markets that have a large Muslim population, such as the UAE, Kuwait, Indonesia, and Malaysia.
For example, analysts at ASEAN Briefing note that while Indonesia began importing Indian buffalo meat in 2016 as a cheaper alternative to Australian beef, it has since found a niche within Indonesia’s wet markets. Indonesia allocated 100,000 tons shipped weight (swt) for its 2022 quota of Indian buffalo meat.
Major FMCG brands like Adani Wilmar, Reliance Industries, and Patanjali have sought halal certification for their exports.
Halal certification in India
India does not have an official regulator for the certification of halal products.
For this purpose, independent organizations like Halal India and Halal Council of India have been set up to assist exporters and businesses with the right labelling requirements. Restaurants in the country, for example, can secure the Halal Certification from these organizations to establish transparency with their Muslim patrons about their sourcing and procurement practices, among other things.
On its website, Halal India states that it has certified more than a hundred companies in India, including French retailer Carrefour, which operates Wholesale Cash and Carry (WC &C), Nirma Salt, Haldiram Namkeens and Sweets, Goldwinner oil, Bikanerwala Foods Pvt Ltd, Bacfo Pharmaceuticals, Ambuja Group, Daawat Basmati Rice, etc.
Step-by-step halal certification process in India
Halal certification generally involves a three-step process in India. Even if the process varies among different certifying agencies, the documents required will be similar.
Applications may also be submitted online.
An application should be forwarded on the official letterhead of the company. It should be accompanied by the following:
- Approvals from the relevant health safety authorities of the state (province) in which the product is to be sold;
- A list of ingredients;
- An undertaking by the company that the product is free from any ingredients containing alcohol or pork derivatives;
- Copy of export license and a list of export markets;
- A specimen of the products in its original packaging; and
- Layout of the production unit and storage facilities.
An audit will be carried of the production facilities. Sanitation and due respect for Islamic practices relating to preparation and packaging of products will be observed. A team consisting of a religious scholar and a competent technical advisor will carry out the audit.
Key areas that will be investigated during the audit include proper documentation; processing, handling, and distribution; storage, display, and product serving; cleanliness, sanitary, and food safety; tools, apparatus, and machines; and packaging and labelling. Documentation to be provided will include information about the raw materials (such as ingredients) – to assess compliance with halal norms.
Based on the recommendation of the auditing team, a body of technical experts shall grant the product a halal certificate.
There are a limited number of halal certification agencies in India, and these are private entities. The government of India does not endorse any of these agencies in the absence of an official halal standard. Instead, halal certification agencies observe Islamic law to the letter.
Companies should note that halal certification is not compulsory for products intended to be sold in India. Businesses exporting halal products and services must ensure the halal certificate is accepted in the destination market.
This article originally appeared on India Briefing
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