Islamic Finance and Halal Industry in UAE Set for Strong Growth

The UAE is solidifying its position as a global leader in Islamic finance and the halal industry, driven by a strategic vision to diversify its economy and boost global competitiveness. Supported by progressive government policies, a robust regulatory framework, and advanced infrastructure, both sectors are experiencing significant growth.

Strategic Initiatives for Islamic Finance

In May 2025, the UAE launched a national strategy to foster an integrated ecosystem for Islamic finance, encompassing banking, Takaful (Islamic insurance), Sukuk (Islamic bonds), and non-banking services aligned with international standards. The Central Bank of the UAE reports that Islamic banks account for 18% of total banking assets and 22.8% of total credit as of February 2025. The Sukuk market is thriving, with Nasdaq Dubai listings surpassing $95.7 billion, establishing the UAE as a global hub for Sharia-compliant instruments. The 2023 launch of dirham-denominated Islamic Treasury Sukuk (T-Sukuk) marked a milestone, and the UAE ranks fourth globally in Islamic financial assets, per the 2023 Islamic Finance Development Indicator.

Jamal Saleh, Director-General of the UAE Banks Federation, emphasized the strategy’s goal to elevate the Islamic economy domestically and internationally. Islamic bank credit reached Dhs503.5 billion, with a 16% annual increase, while deposits hit Dhs595.3 billion, growing 16.9% year-on-year.

Halal Industry Expansion

Parallel to its financial achievements, the UAE is emerging as a global halal industry hub. The national strategy aims to boost halal exports from Dhs74 billion to Dhs315 billion by 2031, leveraging the UAE’s strategic location and world-class infrastructure. Saleh Lootah, Chairman of the UAE Food and Beverage Manufacturers Group, highlighted the strategy’s role in positioning the UAE as a halal production center. A Bonafide Research report projects the UAE’s halal food and beverage market to exceed $31.27 billion by 2029, driven by rising global demand for halal-certified products.

Economic and Regulatory Support

Since the establishment of the UAE’s first Islamic bank in 1975, the sector has grown into a cornerstone of the economy, encompassing Islamic banks, conventional bank Islamic windows, and Sukuk. The UAE’s dynamic economic environment and advanced regulations support Sharia-compliant activities, aligning with national goals for sustainable growth and global leadership in the Islamic economy.