Australia’s Islamic Economy: Beyond Halal Food

From our Correspondent in Australia

Australia may not immediately come to mind when the world thinks about the Islamic economy. It is a predominantly non-Muslim country, geographically distant from the traditional centres of Islamic commerce, and its economy is generally associated with mining, agriculture, education, financial services and advanced services. Yet Australia has quietly established a significant position within the global Islamic economy.

For decades, that relationship was understood principally through halal food—especially Australia’s beef, lamb and agricultural exports to Muslim markets. But the story has evolved. Australia’s participation now extends into pharmaceuticals, cosmetics, Islamic finance, tourism and other areas of the rapidly expanding global market shaped by Muslim consumer demand and Islamic ethical preferences.

The significance of Australia is therefore not simply that it has a growing Muslim population. It demonstrates something much more important: the Islamic economy is becoming a global economic ecosystem rather than an economic preserve of Muslim-majority countries. The scale of Australia’s participation was already evident several years ago. A 2019 Australia Islamic Economy Brief, published by Salaam Gateway, ranked Australia as the ninth-largest Islamic-economy exporter. Its exports to countries of the Organisation of Islamic Cooperation (OIC), across food, pharmaceuticals, cosmetics and apparel and footwear, amounted to US$5.6 billion in 2018, representing 1.8 per cent of total OIC imports. Food and beverages accounted for US$5.3 billion, with meat and live animals alone contributing US$2.1 billion and cereals another US$1.3 billion.

These figures are now historical and should not be presented as Australia’s current Islamic-economy exports. But they establish an important baseline. Australia was already a significant supplier to Muslim markets before the Islamic economy became the strategic concept it is today. And the relationship has considerable room to expand. From the halal abattoir to the global supply chain, Australia’s strongest foundation remains food. Its agricultural reputation, sophisticated food-safety regime, extensive livestock industry and established export infrastructure give it a natural advantage in supplying halal markets. Indonesia, the Gulf countries and other OIC markets have long been important destinations for Australian agricultural products.

Halal certification has consequently become more than a religious requirement. For Australian exporters, it is increasingly a market-access mechanism. This distinction is important. A halal-certified Australian product does not necessarily represent a separate “Islamic industry”. It may be part of Australia’s ordinary agricultural, manufacturing or food-processing economy. What changes is the market to which the product can be sold and the standards it must satisfy. This is precisely why the Islamic economy is difficult to measure through conventional national accounts.

It cuts across existing sectors. A halal steak belongs to agriculture and food manufacturing. A halal pharmaceutical belongs to pharmaceutical manufacturing. A Shariah-compliant mortgage belongs to financial services. A Muslim-friendly hotel belongs to tourism. The Islamic economy is therefore best understood as an economic ecosystem embedded within the wider economy, rather than as a separate industry. The scale of the opportunity becomes clearer when Australia’s position is placed against the global Islamic economy.

The latest State of the Global Islamic Economy 2025/26, published through Salaam Gateway and produced by DinarStandard, estimates Muslim consumer spending across six real-economy sectors—halal food, pharmaceuticals, cosmetics, modest fashion, Muslim-friendly travel, and media and recreation—at US$2.60 trillion in 2024. That figure is projected to reach US$3.56 trillion by 2029, equivalent to a projected compound annual growth rate of 6.5 per cent. Islamic finance adds another enormous dimension: Shariah-compliant financial assets reached approximately US$5.99 trillion in 2024. Taken together, the broader Islamic economic ecosystem therefore approaches US$9 trillion.

This is no longer a niche market. It is a major component of global commerce. And Australia is exceptionally well placed to participate because it possesses many of the capabilities that the next phase of the Islamic economy requires: advanced agriculture, strong regulatory institutions, sophisticated financial markets, scientific research, pharmaceutical expertise, established international supply chains and proximity to the enormous markets of Southeast Asia.

The most interesting question for Australia is therefore not whether it can sell more halal meat. It is whether it can move further up the value chain. The global halal pharmaceutical market is evolving from a relatively narrow compliance-based market into a more sophisticated industry involving local manufacturing, specialist therapeutics, research, supply-chain development and cross-border partnerships.

According to the latest SGIE analysis, Muslim consumers spent approximately US$112 billion on pharmaceuticals in 2024, representing 4.3 per cent year-on-year growth, with spending projected to reach US$146 billion by 2029. The strategic significance for Australia is considerable. Australia already possesses internationally recognised capabilities in medical research, biotechnology, pharmaceutical science and health services. Its opportunity is therefore not simply to manufacture products carrying a halal label, but to integrate halal requirements into sophisticated research, manufacturing and export strategies.

The same principle applies to cosmetics. The global Islamic economy increasingly encompasses questions of ingredients, traceability, ethical sourcing, manufacturing processes, safety and consumer trust. For Australian companies, combining halal compliance with Australia’s reputation for quality and regulatory credibility could create a distinctive competitive proposition. The opportunity is thus moving from halal certification to halal value creation.

Islamic finance remains comparatively small in Australia, but its strategic potential should not be underestimated. Australia has one of the world’s most sophisticated financial systems, yet Shariah-compliant finance has not developed on anything approaching the scale seen in Malaysia, the Gulf or the United Kingdom.  That does not mean the opportunity is insignificant.

A previous Salaam Gateway/DinarStandard analysis estimated Australia’s potential addressable market for Islamic finance and investment at approximately A$248 billion, particularly in areas such as housing finance and superannuation. That figure should be understood correctly: it was an estimate of the addressable opportunity, not the actual size of Australia’s Islamic-finance industry.

Nevertheless, it demonstrates the potential scale of the market. Australia’s financial system is sufficiently deep to support Islamic mortgages, investment funds, superannuation products, business finance and potentially Shariah-compliant infrastructure investment. More importantly, Islamic finance can create a bridge between Australian assets and the enormous pool of global Islamic capital. How significant is it compared with Australia’s economy? This is where analytical discipline is essential. It would be tempting to calculate the value of Australia’s halal exports, Muslim consumer spending, Islamic financial assets and other activities and describe the total as the “Islamic economy’s contribution to Australian GDP”. That would be misleading. The Australian Bureau of Statistics does not classify economic activity according to religious or Shariah status. Consequently, there is no official figure for “Islamic economy GDP”. The appropriate approach is to identify measurable Islamic-economy activities and compare them with the wider Australian economy.

Australia’s economy is enormous by global standards. Its real GDP grew by 1.4 per cent in 2024–25, according to the Australian Bureau of Statistics. The country’s household wealth is measured in the tens of trillions of Australian dollars. Against that scale, Australia’s identifiable Islamic-economy activity remains relatively modest. But that comparison should not obscure the strategic opportunity. The relevant question is not whether the Islamic economy currently constitutes a large percentage of Australia’s GDP. It does not. The relevant question is whether Australia is positioned to capture a growing share of a global market worth trillions of dollars. The answer appears to be yes. Few markets demonstrate this potential more clearly than Indonesia.

Australia’s nearest large Muslim-majority neighbour is also one of the world’s largest Muslim consumer markets. Its geographical proximity, growing middle class and expanding halal ecosystem make it a natural destination for Australian producers. Changes in Indonesia’s halal-certification requirements are likely to make compliance increasingly important for Australian exporters. Rather than viewing this simply as a regulatory burden, Australian businesses could regard it as an opportunity to establish themselves as trusted suppliers to the wider Southeast Asian halal market.

The strategic advantage would come from combining Australian quality with halal integrity. That combination could apply to food, pharmaceuticals, cosmetics, health products, tourism and financial services. The latest global Islamic-economy analysis offers an even more important insight. The Islamic economy is moving from a period characterised primarily by demand growth toward what Salaam Gateway describes as “sovereignty-building”—the development of domestic production capacity, control over supply chains, standards, digital infrastructure and consumer trust.

This development has major implications for Australia. If Muslim-majority countries are increasingly seeking to build their own halal production capabilities, Australia’s opportunity will not simply be to remain a commodity supplier. It must move up the value chain. That means investment in halal-certified manufacturing, pharmaceutical research, cosmetics, biotechnology, food technology, logistics, certification infrastructure and Islamic financial products.

Australia’s future Islamic-economy strategy should therefore be about value creation rather than merely value extraction. The old model was simple: Australia produces, Muslim countries consume. The emerging model is more sophisticated: Australian companies can participate in research, manufacturing, finance, standards, technology, logistics and investment across a global Islamic economic network.

Australia offers an important lesson for Islamic economic thought. The Islamic economy should not be understood as an economic system restricted geographically to Muslim-majority countries. It is increasingly a global network of production, consumption, finance, standards and ethical preferences. A non-Muslim-majority country can become a significant participant because the market is determined not only by geography but by the preferences of consumers and investors. Australia’s experience demonstrates that participation does not require political Islamization, nor does it require the creation of a separate parallel economy. It requires something much more practical: understanding Muslim consumers, meeting credible Islamic standards, producing competitive goods, developing trusted institutions and connecting domestic capabilities to global markets. Australia has already built much of this foundation. Its Islamic-economy story began with agriculture and halal meat. Its next chapter could be written in laboratories, pharmaceutical plants, cosmetics factories, financial institutions, universities, logistics networks and investment markets. The opportunity is therefore larger than halal food. It is an opportunity to participate in one of the most dynamic economic ecosystems of the twenty-first century. And perhaps Australia’s most important lesson for the wider world is this:

The Islamic economy does not belong only to Muslim countries. It belongs to any economy capable of understanding, serving and investing in the markets, values and aspirations that are shaping it.