MUSCAT : In a detailed presentation delivered at the second Themar Islamic Banking Conference 2025, under the theme ‘Islamic Financial Transactions and Economic Stability’, Al Lawati highlighted how Sharia-compliant trade finance tools can serve as catalysts for business expansion, economic diversification, and financial inclusion—both within Oman and globally.

Al Lawati began by placing Islamic finance within the broader global trade landscape. He noted that global trade is projected to hit USD 33 trillion in 2024, up from USD 32 trillion the previous year. Of this, goods and merchandise represent USD 24.4 trillion, while commercial services account for USD 8.7 trillion. The GCC ranks sixth globally in trade volume and third in merchandise trade, with a positive trade balance of USD 164 billion.

The presentation explored the rise of Sharia-compliant industries, including banking, takaful, sukuk, fintech, halal consumer products, and ethical investment vehicles. Al Lawati highlighted a global shift in consumer behaviour, where halal products have transcended religious boundaries and emerged as mainstream choices in conscious consumption.

The Islamic finance sector, currently valued at USD 5.5 trillion, is expected to grow to USD 7.5 trillion by 2028. The halal food sector alone, valued at USD 1.4 trillion in 2022, is projected to reach USD 2 trillion by 2027, while Islamic fashion, cosmetics, and pharmaceuticals also continue to grow at a rapid pace.

Despite the robust expansion of global trade, Islamic trade finance currently represents only 4 percent of the market. Al Lawati underscored the untapped potential in this segment, with Islamic trade finance projected to reach USD 500 billion by 2025, offering massive opportunities for financial institutions that align their offerings with Sharia-compliant principles.

He also noted that Islamic banks currently manage over 70 percent of total Islamic finance assets, underlining their critical role in financing commercial activity.

Al Lawati explained the structure and governance of Islamic trade finance tools, comparing them with conventional banking. Islamic banking offers the same suite of commercial services – such as letters of credit, guarantees, and export financing – but structured through Sharia-compliant contracts, which eliminate interest (riba) and emphasise ethical profit-sharing, asset-backed financing, and equitable risk distribution.

The presentation also outlined how these tools support small and medium enterprises (SMEs), promote economic diversification, and facilitate cross-border trade, particularly among OIC (Organisation of Islamic Cooperation) countries. Al Lawati stressed the growing importance of digital transformation, with fintech and smart compliance tools revolutionizing Islamic financial services.

With a global Muslim population of 2 billion – 25 percent of the world’s total – there is a vast consumer base for Islamic financial products. Additionally, the youth-driven demand, rising incomes, and global awareness of ethical finance have accelerated interest from even non-Muslim markets in the halal and Islamic economy.

Countries like Malaysia, Türkiye, and the UAE were cited as leaders in Islamic finance due to their robust regulatory environments and global integration.

Al Lawati concluded by reaffirming that Islamic trade finance is not only a religious or ethical alternative but a practical, scalable solution that meets modern business needs while supporting sustainable development goals. As economies look for resilient and inclusive growth models, Islamic banking – rooted in values, ethics, and transparency – continues to gain traction on the global stage.

For all the latest news from Oman and GCC, follow us on Twitter, Instagram and LinkedIn, like us on Facebook and subscribe to our YouTube page, which is updated daily.