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Musawamah is a form of Islamic financing under which negotiations between buyer and seller preclude the revelation of the seller’s costs or asking price. While the seller may or may not have full knowledge of the cost of the item being negotiated, they are under no obligation to reveal these costs as part of the negotiation process.

This difference in obligation by the seller is the key distinction between Murabaha and Musawamah with all other rules as described in Murabaha remaining same.

  • Musawamah is the most common type of trading negotiation seen in Islamic commerce
  • Widely used for import financing