have one question regarding Trade and Industry in Islam

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Date: Wednesday, May 25, 2011

Category

Business Matters

Title

I have one question regarding Trade and Industry in Islam

Question

I have one question regarding Trade and Industry in Islam and would like it answered with the view of large corporations or conglomerates. Thereafter please feel free to offer any advice to small/medium businesses and even if you would like to refer me to any good source of literature on the acceptable conduct for businessmen within Islam.

Question 1 : Is it permissible to regulate the flow of goods and services in order to obtain a premium on the eventual sale of those goods/services? (i.e. withholding stocks so that market prices may surge)

Answer

Muhtaram / Muhtaramah

In the Name of Allāh, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāh wa-barakātuh.

 

We thank you for your kind words of encouragement. It is only through your duas that we are able to have the questions answered.

Islam is a complete way of life. Hence, just as emphasis has been placed on ibaadaat (worship), emphasis has also been placed on muasharaat (social ethics) and muamalaat (social dealings) which includes business and economics.

Business in Islam is not only about enriching oneself. It also serves as a means of benefiting and developing society. Therefore, a system of sound rules and morals has been instituted in consideration of fellow human beings. As a result, any transaction which has an element of harm to an individual or society is abhorred in Shariah. It is precisely for this reason that price fixing etc has been declared as prohibited.

Shariah promotes free trade and a competitive market. Every individual is free to sell a commodity on whatever price he wishes. One person would thus sell his commodity on a hirer rate while another would sell the same item at a cheaper rate. Thus, a competition is created in the market. In this approach, the independency of the owner is maintained as well as benefit to the consumer.

Ihtikaar (Regulation of the flow of goods, hoarding) has also been prohibited as ihtikaar is an expression of selfishness. Nabi (sallallahu alayhi wasallam) has said

من احتكر فهو خاطئ(رواه البيهقي)

Whoever withholds, he is a sinner (Sunanul kubra 6/29)

However, the Fuqaha have confined the prohibition of ihtikaar to food items. Therefore, in all other items, ihtikaar will be permissible but discouraged.

ينهي للخروج من الاختلاف بالامام يوسف

رد المحتار – (6- 398 سعيد)

والتقييد بقوت البشر قول أبي حنيفة ومحمد وعليه الفتوى كذا في الكافي ،

بدائع الصنائع في ترتيب الشرائع  – (4-309 دار الكتاب ديوبند)

وعند محمد رحمه الله لا يجري الاحتكار إلا في قوت الناس وعلف الدواب من الحنطة والشعير والتبن والقت .

تبيين الحقائق شرح كنز الدقائق – ( 7-61 دار الكتب العلمية)

وتخصيص الاحتكار بالأقوات قول أبي حنيفة ومحمد رحمهما الله ،

العناية شرح الهداية – (ج 14 / ص 280 المكتبة الشاملة)

وتخصيص الاحتكار بالأقوات كالحنطة والشعير والتبن والقت قول أبي حنيفة رحمه الله ،

الجوهرة النيرة – (ج 6 / ص 176)

وخص الاحتكار بالأقوات كالحنطة والشعير والقت والتبن والحشيش وهو قول أبي حنيفة .

The reading of the following two kitaabs will be beneficial, insha Allah.

1) ‘Islamic finance’ by Mufti Taqi Usmani Saheb Madda zilluhu

2) ‘Shari’ah compliant business campaign’ which has been published by our Darul ifta.

You could also send a request to join the ‘Businessman data’*. The ‘Businessman data’ of the Darul iftaa is a forum meant to educate the Ummah on business related issues of Shariah. There are many Ulama, businessmen and professionals on this data. By the grace of Allah, this data has proven to be very educational and successful.

 

And Allah knows best
Darul Iftaa

Madrasah Inaa’miyyah

 

 

· The Sharée ruling herein given is specifically based on the question posed and should be read in conjunction with the question.

· The Darul Ifta bears no responsibility to any party who may or may not act on this answer. The Darul Ifta being hereby exempted from loss or damage howsoever caused.

· This answer may not be used as evidence in any Court of Law without prior written consent of the Darul Ifta.