The vendor in that marketplace is a dhimmī, and the authorities have approved his transactions.
Furthermore, if a man were to travel to enemy territory (dār al-ḥarb) in order to buy goods, that is permissible in our view. This is confirmed by the report of Abū Bakr—may Allah be pleased with him—who, during the lifetime of the Messenger of Allah, peace and blessings be upon him, engaged in trade in the Syrian lands, which were then a dār al-ḥarb. The same ruling is supported by a report from ʿUmar—may Allah be pleased with him—along with several other narrations that I have discussed in detail elsewhere. Inevitably, their markets include merchandise that can be used in sinful ways.
As for Muslims selling to them—during their festivals—food, clothing, fragrant herbs, and similar items, or giving such things as gifts, this constitutes a form of assistance in establishing their unlawful celebration.
The matter rests on a foundational principle:
It is forbidden to sell grapes or grape juice to unbelievers if they will use it to make wine, just as it is forbidden to sell them weapons with which they would fight a Muslim.
The report from ʿUmar—may Allah be pleased with him—about giving a striped silken cloak to his polytheist brother in Mecca shows that selling them silk is permissible, for silk is generally lawful; its excess is prohibited only for certain people. Hence, using it for medical treatment is deemed permissible according to the soundest opinion