An Islamic index that provides platform for investment under Shariah law was launched in New Delhi on Wednesday, a move that is expected to encourage investors from oil-rich Gulf countries.
The 'India Islamic Index' will be used by institutional and individual investor around the world for portfolio management and benchmarking purposes.
Launching the index in presence of former Chief Justice of India Justice A M Ahmadi and diplomats from many Gulf countries, Delhi Chief Minister Sheila Dikshit said that Shariah-compliant investment can open up a "clean and transparent investment".
"It can also ensure ethical utilisation of funding and thereby encourage inclusive growth," she said.
An investment is considered a Shariah compliant investment if it is made in accordance with Islamic teachings. Investment in manufacture or trade of prohibited items like alcohol, pork, pornography and hotel business is not permitted by the Shariah.
The index has been developed by Indo Arab Economic Cooperation Forum and Institute of Objective Studies in collaboration with Eastwind Capital Advisors Private Limited.
Eastwind Capital MD and CEO Sailendra Kumar said the index will be used by institutional and individual investors around the world for portfolio management and benchmarking purposes, as well as to serve as the basis for structured products and other index linked investment vehicles.
"The Indian capital market, now ranked among top 10 in the world, has the potential to absorb huge investments of the Islamic countries," he said.