Islam & Business

Trade and commerce have always been a part of Islam. From pre-Islamic days, the Holy City of Mecca has been the center of commercial activities. It was indeed the annual trading center of Mecca that provided Prophet Mohammad the forum for preaching Islam. The early Muslims were not only engaged in trade but they went to distant lands in connection with business. Islam in fact reached East and West Africa, East Asia through the business people. Islam encourages work in general, and trade and commerce in particular, Prophet Mohammad was himself engaged in this profession before he became a prophet. He was a successful businessman. Known for integrity, he bore the honorific title, “the Trustworthy”, The Quraan states: “God has made business lawful for you.”

In addition, the Quraan includes rules not only for manners and hygiene, marriage and divorce, but it also lays down detailed rules for commerce and politics, interest and debts, contracts and wills, and industry and finance. Islam has permitted and in fact encouraged business. Islam lays out the basic principles of our economic behavior as consumers, producers and owners of wealth. The Islamic principle in business is based on individual enterprise and correspondingly individual’s reward. It is basically based on benefiting the humanity while maintaining God’s orders.

In business relationships Islam strictly forbids any discrimination between people based on their religion, sex, or gender. There is no basic conflict between good business practice and profit-making in Islam. Islam looks at profit as secondary way to measure efficiency.

Business Ethics in Islam:

1. Trust:

Trust of God’s creation and all that is in it. God has created and perfected the whole universe then Man is set over it all with delegated. So as Muslims we realize that we are just trustee for God’s universe and we truly do not owe anything in this life. That kind of belief along with your knowledge that God sees all what you do, will make you work under constant surveillance, and keeps your performance at its best while following God’s defined conduct.

(Quraan 45-13): And He has subjected to you, as from Him, all that is in the heavens and on earth: behold, in that are Signs indeed for those who reflect.

(Quran 6:164): It is He who hath made you (His) agents, inheritors of the earth: He hath raised you in ranks, some above others: that He may try you in the gifts He hath given you: for thy Lord is quick in punishment: yet He is indeed Oft-Forgiving, Most Merciful.

2. Justice and Honesty:

Justice can be defined as just conduct, fairness exercise of authority in maintenance of right and fair dealing between each other regardless of faith is strictly laid down in Islam. Honesty incorporates the concepts of truthfulness and reliability and covers all aspects of relationships in human life thought, word and action. It is more than just accuracy; it is an attitude with integrity.

(Quran 4:135): O ye who believe! Stand out firmly for justice, as witnesses to Allah, even as against yourselves, or your parents, or your kin, and whether it be (against) rich or poor: for Allah can best protect both. Follow not the lusts (of your hearts), lest ye swerve, and if ye distort (justice) or decline to do justice, verily Allah is well-acquainted with all that ye do.

(Quran 6:115): Perfected is the Word of thy Lord in truth and justice. There is naught that can change His words. He is the Hearer, the Knower.

(Quran 11:85): O my people! Give full measure and full weight in justice, and wrong not people in respect of their goods ‘O you who have attained to faith! Do not devour one another’s possessions wrongfully, not even by way of trade based on mutual agreement, and do not destroy one another: for behold, God is indeed a dispenser of grace unto thee!

(Quran 4:29): Oh ye who believe! Eat not up each other’s property by unfair and dishonest means.”

3. Mutual Respect:

The third principle is mutual respect and consideration for others is also inherent in the moral teachings of Islam. The application of this has come to mean that self-interest only has a place in the community in as much as it takes into account the interests of others. So a person or organization can not under self benefit measures takes an action or start a business that will harm the community or environment more than providing good to it. The Prophet Muhammad (PBUH) said: “You will not attain righteousness, unless you give of that which you love”. And said “God loves kindness when you deal with any matter” And also said: “You will not enter Paradise until you have faith and you will not have faith until you love one another”.

What is forbidden in Business in Islam:

1. Islam has not permitted producing, selling and purchasing of goods, which are prohibited in Islamic law like Alcohol or Drugs.. The Prophet of Islam has said: “When God prohibits a thing He prohibits (giving and receiving) the price of it as well.”

2. Islam has also prohibited any kind of transaction involving uncertainty, as this could lead to quarrel or litigation. The Prophet of Islam has forbidden transaction involving unspecified quantity, acceptance of money for fish in the river or bird in the air as there is element of uncertainty. Similarly the Prophet of Islam has prohibited sale of fruit till they are ripened. However; if the element of uncertainty is very small, the transactions are permissible.

3. Islam condemns hoarding to make high profit at the cost of public interest (when it is needed or so it will become needed). Islam, however; allows normal trade – buying and selling of goods again and again at a reasonable profit.

4. Islam prohibits fraud in business dealings. The Prophet has said: “Sell the good and bad separately. He who deceives is not of us” The sin of fraud is greater if the seller supports it by swearing falsely. The Prophet has said, “Swearing produces ready sale but blots out blessing”.

5. Islam prohibits buying or selling what�s legal if we know that it will be used for illegal use: weapons, abortion drugs, drugs for meth making, and so on.

6. INTEREST: Muslims are not allowed to pay or receive interest. This is a shared value in all religions. The Quran is explicit about it and says, “God has permitted for you trade and prohibited interest” (2 : 275). The Bible says: “and lend, never despairing; and your reward shall be great, and ye shall be sons of the Most High” Luke 6:35.

Islamic or Sharia Banking: Depositors in an Islamic bank would be treated like shareholders, would receive dividends when the bank makes a profit, and would lose capital when it suffers a loss. The prohibition or fixed interest flows from Islam’s concern for social justice Interest is said to reinforce a tendency for wealth to accumulate in a few hands So how would you buy a house for example? A new trend has recently started that work as follows: An Islamic financing company buys the house. The house then is leased back to you for a fixed period of time. You pay the finance group the rent value plus an additional amount for the house purchase. The value or the lease home will be reassessed every year, and the rent will be adjusted accordingly.


To close let us reassure that it is the responsibility of every Muslim to be ethical in their daily business practices and to act responsibly toward the community in which it serves. To review its business practices and remove from its organization any unlawful activities and devote themselves to productive and lawful activities that benefit mankind. It is everyone’s responsibility to take a long and serious look at their organization and implement policies and procedures that are conducive.

As a general guide to Muslims in business we should adopt the following overriding principles:

  • Love God and his commands more than your trade or business.
  • Be honest and truthful.
  • Keep one’s word.
  • Be humble in how you conduct your life.
  • Do not deal in fraud.
  • Do not bribe.
  • Deal justly.

United Nations Global Compact:

United Nations Global Compact

The United Nations Global Compact is a strategic policy initiative for businesses that are committed to aligning their operations with the ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption.

The ten universally accepted principles advocated by the United Nations Global Compact are the same as the Islamic principles is business as advocated by Quraan and Prophet Muhammad (PUBH), 1400 years ago. Therefore, Muslim owned businesses should align their operation and strategies with the principles of United Nations Global Compact and show their commitment towards the cause.

Muslim Business Council of India is an active participant of the United Nations Global Compact.

One Response to Islam & Business

  1. Asif Iqbal says:

    Great to know about the Muslim Business Council Of India.I try to contact to know more about this,But not a single phone number is working.

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