According to the latest industry assessment by TechSci Research, the Global Sukuk Market was valued at USD 1.13 Billion in 2024 and is projected to reach USD 2.33 Billion by 2030, registering a robust CAGR of 12.8% during the forecast period. This remarkable trajectory underscores the accelerating transformation of Islamic finance from a niche segment into a mainstream component of the global capital market ecosystem.

Sukuk, often referred to as Islamic bonds, represent asset-backed financial certificates structured in compliance with Sharia principles. Unlike conventional bonds that are interest-bearing instruments, Sukuk are built on ownership participation in tangible assets, usufructs, or services, thereby ensuring adherence to the prohibition of riba (interest). Over the past decade, Sukuk have evolved beyond their traditional strongholds in the Gulf Cooperation Council (GCC) and Southeast Asia to gain traction in Europe, Africa, and parts of East Asia.

The growth of the global Sukuk market reflects broader shifts in investor sentiment—toward ethical investing, sustainable financing, and diversified asset allocation strategies. Governments, corporates, and financial institutions are increasingly leveraging Sukuk structures to mobilize capital for infrastructure, renewable energy, transportation networks, and public utilities. At the same time, conventional institutional investors are embracing Sukuk as a low-volatility, asset-backed alternative within fixed-income portfolios.

Market Overview

The global Sukuk market has entered a new era of expansion characterized by innovation, cross-border participation, and increasing sophistication in structuring. The combination of regulatory maturation, technological advancements, and ESG integration has positioned Sukuk as a dynamic growth engine within the broader Islamic finance industry.

Several structural factors are shaping this upward momentum:

  • Rising demand for Sharia-compliant investment products

  • Expansion of sovereign and quasi-sovereign issuance

  • Growing appetite for ESG-aligned financial instruments

  • Technological integration in issuance and settlement processes

  • Strengthening regulatory frameworks across key markets

Countries such as Malaysia, Indonesia, Saudi Arabia, and the UAE continue to serve as pillars of Sukuk issuance, while new entrants from Africa and Europe are broadening the market’s geographic footprint.

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Emerging Trends in the Global Sukuk Market

1. Rise of ESG and Green Sukuk

One of the most transformative trends redefining the Sukuk landscape is the rapid emergence of ESG-linked and Green Sukuk. The intrinsic alignment between Islamic finance principles and sustainability objectives has catalyzed the issuance of instruments funding renewable energy, sustainable transportation, water management, and social infrastructure.

Green Sukuk are structured to ensure that proceeds are allocated to environmentally sustainable projects. Nations such as Indonesia and Saudi Arabia have pioneered sovereign green Sukuk frameworks, reinforcing their commitment to climate action and sustainable development. These instruments not only attract faith-based investors but also appeal to ESG-focused global funds seeking responsible investment avenues.

The convergence of Sharia compliance and sustainability metrics is expected to remain a defining trend through 2030F.

2. Digitalization and Blockchain Integration

Technological integration is revolutionizing Sukuk issuance and trading. Blockchain platforms are being explored to enhance transparency, traceability, and operational efficiency. Smart contracts can automate profit distribution, asset management, and compliance verification, significantly reducing administrative complexity.

Digital Sukuk platforms also democratize access by lowering entry barriers for retail investors. As financial ecosystems continue to digitize, Sukuk markets are expected to leverage fintech innovations for improved liquidity and cost optimization.

3. Cross-Border Issuance and Currency Diversification

Globalization of Sukuk issuance has gained momentum. Instruments are increasingly denominated in major international currencies such as the US dollar and Euro to enhance global liquidity and attract institutional investors.

The growing acceptance of Sukuk in non-Muslim majority countries reflects their versatility and competitive risk-return profile. This cross-border integration is expected to further deepen the market.

4. Expansion into Infrastructure Financing

Sukuk structures are particularly suited for infrastructure projects due to their asset-backed nature. Governments are utilizing Ijarah and Istisna Sukuk to fund large-scale development programs, airports, highways, power plants, and smart cities.

With infrastructure deficits persisting across emerging economies, Sukuk are likely to play an increasingly pivotal role in bridging financing gaps.

Key Market Drivers

Growing Demand for Ethical Investments

Global investors are prioritizing socially responsible and ethical investment frameworks. Sukuk, rooted in risk-sharing and asset-backed principles, resonate strongly with this shift in investor philosophy. The appeal extends beyond Muslim-majority populations to ESG-conscious institutional players worldwide.

Government Support and Regulatory Evolution

Regulatory frameworks in Malaysia, the UAE, Indonesia, and Saudi Arabia have matured significantly. Standardized guidelines, investor protection mechanisms, and transparent Sharia governance frameworks have enhanced market credibility and reduced compliance risks.

Infrastructure Development Initiatives

Massive public spending programs in GCC and Southeast Asia require alternative financing mechanisms. Sukuk provide governments with Sharia-compliant funding avenues without relying on interest-based debt.

Diversification Benefits

For global portfolio managers, Sukuk offer diversification benefits due to their distinct risk structure and asset-backed nature. They tend to exhibit relatively lower volatility compared to conventional bonds during periods of economic uncertainty.

Market Challenges

Despite strong growth prospects, certain structural challenges persist:

  • Lack of universal standardization in Sukuk structuring

  • Limited secondary market liquidity

  • Dependence on economic stability in core issuing regions

  • Complex legal frameworks across jurisdictions

Harmonization of global Sharia standards and improved trading mechanisms could mitigate many of these constraints.

Market Segmentation Analysis

The Global Sukuk Market is segmented by:

  • Sukuk Type

  • Currency

  • Issuer Type

  • Region

By Sukuk Type

Among various structures—Murabahah, Salam, Istisna, Ijarah, Musharakah, and Mudarabah—Ijarah Sukuk has emerged as the fastest-growing segment.

Why Ijarah Sukuk Leads

Ijarah Sukuk are lease-based instruments where investors gain proportional ownership in leased assets and earn returns through rental income. This structure closely mirrors conventional bond mechanisms, making it easier for conventional investors to transition into Islamic finance.

Key advantages include:

  • Tangible asset backing

  • Simplified compliance structure

  • High transparency

  • Suitability for long-term infrastructure financing

The segment’s dominance is expected to continue, particularly as governments prioritize infrastructure-led economic growth.

By Currency

The Indonesian Rupiah is currently the fastest-growing currency segment in the global Sukuk market.

Indonesia’s Strategic Role

Indonesia, home to the world’s largest Muslim population, has proactively developed its domestic Islamic capital market. Through consistent retail and wholesale Sukuk issuance, the government has strengthened investor participation and financial inclusion.

Retail Sukuk programs have enhanced public engagement, allowing individual investors to participate in sovereign financing. Reduced currency risk and stable macroeconomic conditions have further boosted investor confidence.

Other key currencies include the Turkish Lira, Saudi Riyal, Kuwaiti Dinar, and US Dollar.

By Issuer Type

Sukuk issuance spans multiple issuer categories:

  • Sovereign

  • Corporate

  • Financial Institutions

  • Quasi-Sovereign

Sovereign issuers remain dominant due to large-scale infrastructure financing needs, while corporate participation is steadily increasing as companies diversify funding sources.

Competitive Analysis

The global Sukuk market is characterized by strong participation from leading Islamic banks and multinational financial institutions. Key players include:

  • Abu Dhabi Islamic Bank PJSC

  • Al Baraka Banking Group

  • Al-Rajhi Bank

  • Banque Saudi Fransi

  • Dubai Islamic Bank

  • HSBC Holdings Plc

  • Kuwait Finance House

  • Malayan Banking Berhad

  • Qatar International Islamic Bank

  • RHB Bank Berhad

Competitive Dynamics

  1. Product Innovation: Institutions are designing hybrid Sukuk structures to enhance flexibility and investor appeal.

  2. Geographic Expansion: Banks are expanding operations into emerging Islamic finance markets.

  3. Digital Transformation: Fintech collaborations are improving issuance efficiency.

  4. Sustainability Focus: Increased issuance of green and ESG-linked Sukuk enhances brand positioning.

Strategic partnerships, regulatory compliance excellence, and Sharia governance strength remain core competitive differentiators.

Industry Key Highlights

  • Market valued at USD 1.13 Billion in 2024

  • Projected to reach USD 2.33 Billion by 2030

  • CAGR of 12.8% during forecast period

  • Ijarah Sukuk fastest-growing type segment

  • Indonesian Rupiah fastest-growing currency segment

  • Strong sovereign issuance dominance

  • Rising ESG and Green Sukuk adoption

  • Expanding cross-border participation

  • Increasing fintech integration

  • Growing appeal among conventional investors

Future Outlook

The future of the global Sukuk market appears highly promising. As sustainability goals become central to global policy agendas, Sukuk structures are expected to play a vital role in financing green infrastructure and social development initiatives.

Technological innovation will likely enhance transparency and reduce issuance costs, encouraging broader participation. Furthermore, regulatory harmonization across jurisdictions could unlock significant liquidity and cross-border investments.

The market is anticipated to witness:

  • Increased corporate participation

  • Expansion into African and European markets

  • Greater standardization in structuring

  • Higher retail investor engagement

  • Integration with global ESG frameworks

By 2030F, Sukuk are projected to solidify their position as a mainstream global fixed-income asset class.

10 Benefits of the Research Report

  1. Comprehensive market size and forecast analysis through 2030F

  2. Detailed segmentation by Sukuk type, currency, issuer, and region

  3. In-depth competitive landscape profiling

  4. Identification of emerging trends and innovations

  5. Strategic insights into growth drivers and challenges

  6. Evaluation of regulatory developments across key markets

  7. Analysis of ESG and sustainability integration

  8. Data-driven decision-making support

  9. Risk assessment and opportunity mapping

  10. Actionable intelligence for investors and policymakers

Conclusion

The Global Sukuk Market stands at a transformative juncture. From being a regional financial instrument rooted in Islamic jurisprudence, Sukuk have evolved into globally recognized ethical investment vehicles. With robust growth projections, expanding geographic reach, technological integration, and sustainability alignment, the market is well-positioned for sustained expansion through 2030F.

Despite structural challenges such as liquidity constraints and regulatory variations, innovation and policy support are expected to reinforce market resilience. As investor priorities shift toward responsible and asset-backed financing, Sukuk are poised to become an indispensable pillar of the global financial architecture.

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