Businesses seek single halal authority as certification hurdles impede export growth

Infographic: TBS

Highlights:

• Businesses allege bribery in halal certification process
• High costs discourage firms from seeking official certificates
• Exporters seek single internationally recognised halal authority
• Lack of Saudi recognition hampers Bangladesh's halal exports
• EPB urges unified certification to unlock global halal market

Bangladesh's exporters and government officials have identified the country's fragmented halal certification system as one of the biggest obstacles to tapping the rapidly expanding global halal economy, calling for the establishment of a single national halal authority to boost competitiveness.

The global halal economy is now valued at $5.2 trillion, yet Bangladesh exported halal products worth only $943 million in the last fiscal year, according to industry leaders.

They pointed out that the country's export potential is being hampered by allegations of bribery, high certification fees, lengthy approval processes and the lack of international recognition for locally issued halal certificates.

Currently, both the Islamic Foundation and the Bangladesh Standards and Testing Institution (BSTI) issue halal certificates independently. Businesses argue that the dual certification system weakens Bangladesh's halal branding and creates unnecessary costs and delays.

The concerns were raised yesterday at a workshop titled "Halal for Export Diversification," organised by the Bangladesh Chamber of Industries (BCI) in Dhaka.

Speakers said Bangladesh has made progress in developing its halal industry in recent years, but institutional weaknesses and the absence of an effective regulatory framework have prevented the country from fully capitalising on the growing global market.

Exporters also said obtaining halal certification is expensive and time-consuming. Manufacturers are required to pay separate fees for individual products, undergo repeated factory inspections and submit multiple laboratory test reports, creating a significant financial burden.

Some of the required tests, including those for heavy metals and pesticide residues, cannot even be conducted domestically, they said.

Exporters allege bribery and lack of global recognition

Khurshid Ahmad Farhad, general manager for International Business and Corporate Affairs at Bombay Sweets and Company Limited, said companies face high fees and repeated inspections when seeking halal certification from the Islamic Foundation and BSTI.

He said the company initially paid Tk16-18 lakh in certification fees for several products. Although the fees were later reduced by half, the company has still not received its certificates despite paying around Tk14.5 lakh.

Farhad also alleged that companies are forced to pay bribes during the certification process.

"When applying for halal certificates, there are non-halal activities involved - you have to pay bribes," he alleged.

He further claimed that neither the Islamic Foundation nor BSTI is recognised by the Saudi Accreditation Center, forcing exporters shipping to Saudi Arabia to obtain halal certificates from accredited bodies in countries such as India, Singapore or Thailand.

As a result, Bombay Sweets removed halal logos from about 50 of its more than 200 products, spending approximately Tk62 lakh solely on redesigning packaging.

Calls for a single halal authority

During an open discussion, Zia Hayder Mithu, a BCI director and chairman of Easy Process Food, alleged that officials conducting halal certification inspections demand transportation and hospitality.

"They ask us to provide vehicles because a large inspection team will visit, and we have to arrange meals for them. After that, they charge Tk2 lakh annually for exports of 200 tonnes. If I have to pay these fees for thousands of products, I don't need such certificates," he said.

He called for halal certification to be provided free of charge.

Representatives from leading halal exporters, including Pran, Paragon, Akij, Meghna and Bengal Meat, also attended the workshop and expressed support for the exporters' concerns.

Huge untapped market

Mohammad Hasan Arif, vice chairman of the Export Promotion Bureau (EPB), said Bangladesh exported halal products worth $943 million last year, most of which were agricultural and processed food products.

However, he noted that major opportunities also exist in cosmetics, pharmaceuticals, fashion, tourism, manufacturing, Islamic finance, technology and education.

"The global halal economy is now worth $5.2 trillion. It presents a significant opportunity for Bangladesh to diversify its exports, products and export destinations," he said.

Delivering the keynote presentation, Md Mominul Islam, assistant professor of marketing at IUBAT, said the global halal market is projected to reach $9.45 trillion by 2040.

He said Bangladesh needs to develop a complete halal ecosystem encompassing supply chains, education, certification and industry collaboration, citing Malaysia as a successful model.

Although Bangladesh benefits from a strong agricultural base, competitive labour costs, industrial capacity and a Muslim-majority population, policy gaps, limited academic preparedness and a lack of specialised education in halal science and supply chain management continue to hold the sector back, he added.

Prof Md Deen Islam of the University of Dhaka said the halal economy should be viewed not only from a religious perspective but also as a business opportunity centred on quality, safety and consumer confidence.

"Despite being one of the world's largest Muslim-majority countries, Bangladesh has only around 300 halal-certified manufacturers, 600-700 certified export products, and halal exports of less than $1 billion, leaving its share of the global market negligible," he said.

Responding to the allegations of bribery, SM Abu Sayeed, deputy director (Halal Certification) at the Bangladesh Standards and Testing Institution (BSTI), told The Business Standard that the claims were "false."

"Those who made these allegations have not even applied to us for halal certification," he said.

Abu Sayeed added that the government-prescribed fee for obtaining a BSTI halal certification licence ranges from Tk1,000 to Tk5,000.