Shariah Appraisal of Insurance and Incoterms in International Trade

Abstract

Import and export business plays a very significant role in the market and the economy of the country. Pakistan is an Islamic state, and Muslims are obliged by Islamic rulings to certain practices and limitations to be observed in their trade activities. For that purpose, it is much needed that some important aspects of Imports, and exports business should be evaluated in the light of Islamic law. As it is known insurance plays a very basic role in risk management of such a big business. As well as it is also a legal requirement in most cases. But on the other hand, it consists of some prohibited elements according to the Islamic law.

            This research identifies the legal requirements of the insurance in different stages of the imports, and exports business, as well as evaluates those issues in the light of Islamic law. It further discusses the solutions in the light of Islamic law and elaborates on the Islamic alternative for insurance, which is known as the Takaful.