Best Halal Mutual Funds In India (2025 List)

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The best halal mutual funds in India in 2025 are:

Tata Ethical Fund – actively managed, TASIS-supervised, long-standing Shariah-compliant equity fund.
Taurus Ethical Fund – actively managed by Taurus Mutual, guided by ShariahCap Advisors.
Nippon India ETF Nifty 50 Shariah BeES – exchange-traded fund tracking the Nifty50 Shariah Index.
Quantum Ethical Fund – newly launched ESG-integrated fund under ShariahCap Advisors supervision.

Although still relatively niche, the availability of Shariah-compliant mutual funds in India has expanded in recent years. Unlike traditional mutual funds, these funds carefully filter out companies that earn revenue through riba (interest), pork products, or other activities considered impermissible under Islamic law. Each fund is managed based on specific screening criteria such as sector involvement and financial ratios, ensuring alignment with religious guidelines. Some take a passive, index-linked approach, while others are actively managed by professionals with oversight from recognized Shariah scholars. Both standard mutual funds and Shariah-compliant ETFs are available, offering investors a diverse set of options for building a portfolio that reflects their values.

Risk warning: All investments carry risk, including potential capital loss. Economic fluctuations and market changes affect returns, and 40-50% of investors underperform benchmarks. Diversification helps but does not eliminate risks. Invest wisely and consult professional financial advisors.

List of halal mutual funds in India

As of 2025, investors exploring Islamic mutual funds in India have access to a growing set of options aligned with Shariah investing principles. Currently, four schemes qualify as compliant, each reviewed by TASIS or ShariahCap Advisors to ensure they steer clear of industries like alcohol, tobacco, gambling, and interest-based finance. Among these, one is actively traded on the NSE, making it part of the officially recognized list of halal mutual funds in India including NSE stocks.

Tata Ethical Fund

This long-standing fund invests in sustainable Indian companies that meet Shariah guidelines. Managed by Tata Asset Management and supervised by TASIS, it avoids stocks earning revenue from interest, speculation, and other restricted areas. For investors seeking long-term capital appreciation through ethical means, it remains a solid pick from the top 10 halal mutual funds in India.

Type. Actively managed
Shariah supervision. TASIS
Launch date. May 24, 1996
NAV. ₹413.34 (Direct-Growth, as of March 31, 2025) / ₹377.54 (as of May 30, 2025)
AUM. ₹3,216.02 crore (as of March 31, 2025) / ₹3,334.3 crore (as of May 30, 2025)
Returns. 1 year: -0.89%, 3 years: 13.33%, 5 years: 21.57%
Minimum investment. ₹5,000 / SIP from ₹100
Fees. Expense ratio: 1.92% (Regular Plan), exit load: 0.50% if redeemed within 90 days.

Taurus Ethical Fund

Taurus Mutual Fund offers this actively managed scheme under the guidance of ShariahCap Advisors. It applies fundamental research along with Shariah screening to balance performance with faith-based filters. For those looking beyond returns and aiming for religious compliance, this fund consistently ranks among the best halal mutual funds in India.

Type. Actively managed
Shariah supervision. ShariahCap Advisors
Launch date. March 20, 2009
NAV. ₹119.52 (as of April 25, 2025) / ₹140.49 (as of May 30, 2025)
AUM. ₹285.4 crore (as of April 30, 2025)
Returns. 1 year: 0.52%, 3 years: 16.2%, 5 years: 20.9%
Minimum investment. ₹500 / SIP from ₹500
Fees. Expense ratio: 2.39%, exit load: 1% if redeemed within 365 days.

Nippon India ETF Nifty 50 Shariah BeES

For passive investors, this ETF tracks the Nifty50 Shariah Index and offers exposure to some of India’s largest Shariah-compliant companies. It’s the only fund in the halal mutual funds list in India that trades on the exchange, requiring a demat account to invest. It’s ideal for those looking for broad-market exposure within a faith-based framework.

Type. ETF
Index. Nifty50 Shariah
Shariah screening. Built into the index composition
NAV. ₹501.57 (as of May 30, 2025)
AUM. ₹34.82 crore (as of April 30, 2025)
Returns. 1 year: 1.69%, 3 years: 8.27%, 5 years: 16.63%
Fees. 0.96%

Quantum Ethical Fund

Launched in late 2024, this is the newest fund in the Shariah-compliant category. It merges Islamic filters with ESG principles, placing focus on companies with consistent revenues and low-interest liabilities. With oversight from ShariahCap Advisors, this innovative option expands the landscape for anyone browsing a list of halal mutual funds in India on NSE or searching for modern, ethical alternatives.

Type. Actively managed
Shariah supervision. ShariahCap Advisors
Launch date. December 20, 2024
NAV. ₹9.86 (as of June 2, 2025)
AUM. ₹51.25 crore (as of April 30, 2025)
Returns. Less than one year of performance data.
Minimum investment. ₹500 / SIP from ₹500
Fees. 2.10% (some plans at 1.00%)

Together, these four funds form the foundation of the top 10 halal mutual funds in India, offering investors a clear path to grow wealth without compromising on religious values. Whether you’re just exploring halal mutual funds list in India or already investing, these schemes provide a diversified set of ethical, Shariah-compliant options.

What mutual funds are considered halal in India?

Halal mutual funds

In India, halal mutual funds are collective investment schemes that are designed to comply fully with Islamic principles. Like most halal investment options in India, these funds exclude companies and financial instruments that deal with prohibited sectors such as alcohol, tobacco, gambling, weapons, adult entertainment, insurance, and interest-based banking. All the top halal mutual funds are closely monitored by a certified Shariah advisory board to ensure that the portfolio remains compliant through regular screening and ethical governance.

A Shariah-compliant mutual fund is structured in a way that filters out not just entire sectors but also evaluates financial ratios. For example, companies included in the portfolio must maintain a debt-to-asset ratio below a specified threshold, typically capped at one-third of total assets. Additionally, income generated through interest (riba) must remain within narrowly defined limits. If any company fails to meet these requirements, it is excluded from the investable universe. This process ensures that the fund remains suitable for Muslim investors looking to align with Islamic finance.

To be recognized as a halal mutual fund in India, the fund must be reviewed and approved by an officially recognized Shariah board. In India, two key institutions, TASIS (Taqwaa Advisory and Shariah Investment Solutions) and ShariahCap Advisors, are responsible for certifying such funds. They carry out detailed audits, certify portfolio holdings, and issue ongoing compliance reports. If a fund fails to meet their criteria during a periodic review, it is promptly removed from the list of approved Shariah-compliant investments.

A mutual fund must fulfill three main conditions to be classified under the halal category: strict sector screening, financial ratio checks, and ongoing governance by a qualified Shariah body. Funds such as Tata Ethical Fund, Taurus Ethical Fund, and Nippon India ETF Shariah BeES meet these requirements and are often included in lists of funds designed for ethical investing in India. These examples help clarify how mutual funds for Muslim investors in India are evaluated and identified.

The answer to the question, is mutual fund halal in India, depends entirely on how the fund is constructed, monitored, and certified. As of 2025, there are several options available for those who seek to invest in line with Islamic ethics. With proper due diligence and guidance from certified institutions, Muslim investors in India can confidently participate in the mutual fund market without compromising on religious values.

Best investments for Muslim investors in India

For Muslim investors in India, investing isn’t just about avoiding alcohol or gambling stocks. It’s about making sure the company’s finances fit what Islamic finance allows, like limiting interest-based income and keeping debt within a set limit. What many investors miss is that even a company with good products can be excluded if its balance sheet crosses a few red lines. That’s where the best Shariah mutual funds in India come in, offering a mix of faith and solid investing.

The list of halal mutual funds in India is still short, but it's slowly expanding. Most fund houses don’t focus on this, but a few have stepped up with unique options built for this purpose. These funds only pick stocks that are approved by scholars checking for Shariah rules. One of the most well-known examples is Tata Ethical Fund, which has been around since 1996. It often shows up on any solid list of top 10 shariah compliant mutual funds in India.

What makes these funds special isn’t just that they follow the rules of the faith, but also how they’re built. Many of them track global Muslim-friendly benchmarks and stick to a tight rebalancing schedule to stay clean. This appeals not just to Indian investors but also to NRIs looking for choices that make sense worldwide. For anyone asking which mutual fund is halal in India, the real answer depends on how strict the fund’s filters are and who’s behind them.

Another thing that often goes unnoticed is the team behind these funds. A good halal mutual fund is guided by a Shariah board, a group of experts who regularly review the fund and give it a green light. In India, teams like TASIS handle this job. Without them, many funds that claim to be Islamic wouldn’t actually pass the test. That’s why the best Shariah mutual funds in India aren’t just about names. They’re about the people and process ensuring everything stays clean and compliant.

If you are open to broadening your universe outside of halal mutual funds in India, there are plenty of other halal investment options worth considering. Whether it’s in the stock market, Forex, or even crypto, several platforms now offer Islamic trading accounts built to meet the standards of ethical finance. These accounts avoid interest-based charges and ensure that your investments stay in line with your values. If that aligns with your goals, take a look at the curated list of halal-friendly platforms below to find one that fits your style.

Best brokers that offer Islamic account
	Currency pairs	Min. deposit, $	Regulation	TU overall score	Open an account
OANDA	68		FSC (BVI), ASIC, IIROC, FCA, CFTC, NFA	6.8	Open an account Your capital is at risk.
Plus500	60	100	FCA, CySEC, MAS, ASIC, FMA, FSA (Seychelles)	6.83	Open an account Your capital is at risk.
RockGlobal	50	200		1.97	Study review
Pepperstone	90		ASIC, FCA, DFSA, BaFin, CMA, SCB, CySec	7.17	Open an account Your capital is at risk.
FOREX.com	80	100	CIMA, FCA, FSA (Japan), NFA, IIROC, ASIC, CFTC	6.95	Study review

For more information on halal investing, you may refer to our guides:

Sukuk bonds in India.
Halal ETFs and index funds in India.
Halal stocks in India.

Earn halal returns in India by targeting Shariah-funds with ethical filters and low portfolio churn

Many first-time investors in halal mutual funds in India simply choose the one with the highest returns and a Shariah-compliant label. But here’s what most don’t realize – if a fund keeps buying and selling stocks too often, it may still fall into risky territory, even if the sectors are technically halal. High turnover can mirror speculative behavior, which isn’t in line with Islamic investing values. Instead, go for funds with a low turnover rate. They tend to stick to stable, ethical investing patterns that better reflect Shariah intent.

Also, don’t skip the small print on who’s actually reviewing the fund for compliance. Some funds are just surface-level halal. The stronger ones are backed by qualified scholars and follow strict auditing standards, like those laid out by global Islamic finance boards. That extra level of review ensures that the fund truly avoids grey areas like debt-based income or unethical sectors. It might feel like too much research at first, but in the long run, it gives both returns and reassurance.

Conclusion

As of 2025, halal mutual funds in India include a set of instruments with certified Shariah compliance. These funds track indices aligned with Islamic guidelines and are accessible through major online investment platforms. Asset structures are built based on sectoral and financial filters defined by Shariah boards. Ongoing audits and issuer screenings provide a clear framework for selection. Available options include both index-based ETFs and actively managed strategies. While incorporating SIP allows structured, long-term exposure within the scope of compliant products.

FAQs

Can individual investors screen stocks for Shariah compliance themselves?

Yes, there are online tools available that allow screening based on financial ratios, business activity, and permissible thresholds for non-compliant income.

How often do mutual fund holdings change?

Holdings may be updated monthly or quarterly, especially in index-linked funds. Monitoring updates is necessary to track ongoing Shariah conformity.

Are there currency-related considerations in halal mutual fund investing?

Funds are denominated in local currency, but non-resident investors should factor in exchange rate fluctuations when assessing net returns.

How should dividends be handled in a halal portfolio?

Some dividends may include income from non-permissible sources. Investors typically purify such amounts using a proportion-based calculation tied to the fund’s income breakdown.

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Chinmay Soni is a financial analyst with more than 5 years of experience in working with stocks, Forex, derivatives, and other assets. As a founder of a boutique research firm and an active researcher, he covers various industries and fields, providing insights backed by statistical data. He is also an educator in the field of finance and technology.

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