Best Halal Investment Options In India (2025)

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Financial instruments that comply with Shariah law are becoming increasingly popular among Indian Muslim investors seeking ethical ways to grow their wealth. These products steer clear of interest (riba), gambling elements, and industries that are considered impermissible. Among the most trusted and widely used halal investment options in India are Islamic mutual funds, Shariah-compliant stocks, Sukuk (Islamic bonds), real estate, gold, and specialized Islamic ETFs. Each of these avenues is designed to follow Islamic ethical standards and promote responsible investing.

The rise of ethical investing has led to a noticeable shift in how Muslim investors approach wealth-building in the country. As awareness grows, more individuals are exploring halal investment in India not just to avoid interest but also to ensure their financial choices align with their personal and religious values. This article explores the most promising halal investment choices for 2025 and how they cater to the evolving needs of faith-conscious investors.

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.

What is halal investment in India?

Halal investing isn’t just about avoiding obvious haram sectors. It’s a way of investing that sticks to Islamic rules of fairness, shared risk, and ethical intent. When we talk about Shariah investment in India, we’re referring to financial products that don’t involve interest, gambling, or harmful industries. What makes it tricky in India is that there’s no clear system or authority to certify what’s truly halal, so Muslim investors often rely on private advisors or specialized platforms to help them stay within Islamic boundaries.

For an investment to be considered halal, it has to follow certain rules:

It can’t make money from haram activities like alcohol, pork, or traditional banking.
It shouldn’t involve interest-based earnings.
The company’s debt levels should stay below Shariah-approved limits (usually under 33%).
The investment should not involve speculation or high risk.
It must be clear how the money is being used and where it’s going.

What many people don’t realize is that Indian halal investors often overlook some of the best halal investment options beyond stocks. Sukuk (Islamic bonds), gold ETFs backed by real gold, and even halal property funds are now showing up on Indian platforms, but they’re not widely talked about. Tech-savvy Muslim investors are starting to use global halal platforms that accept clients from India and offer easy access to international assets that follow Shariah rules. As this space grows, more people want clear and honest halal options that make Islamic investment in India easier and more accessible.

Top halal investment options in India

Shariah-compliant stocks

Muslim investors looking for ethical stock market opportunities can choose from companies that meet Islamic guidelines. These Shariah-screened Indian stocks exclude businesses involved in prohibited sectors like banking, alcohol, gambling, and tobacco. For those exploring Sharia based investments in India, this option provides a faith-aligned entry into equity markets without compromising religious principles. For those looking to invest in halal stocks in India, we suggest referring to our guide on best halal stocks in India.

Shariah-compliant stocks in India
Company Name	Ticker	Sector	Shariah Board/Screening Provider	Notes
Hindustan Unilever Ltd	NSE: HINDUNILVR	Consumer Goods	TASIS, Islamicly	Low debt, consistent ethical screening
Infosys Ltd	NSE: INFY	IT Services	TASIS, Islamicly	Popular halal tech stock; strong balance sheet
Tata Elxsi Ltd	NSE: TATAELXSI	Tech/Design Services	Islami Investments, TASIS	No exposure to prohibited industries
Wipro Ltd	NSE: WIPRO	IT/BPO	Islamicly	Frequently reviewed for halal compliance
Divi’s Laboratories	NSE: DIVISLAB	Pharmaceuticals	Islamicly	Minimal interest income, no haram-sector activity
Larsen & Toubro Infotech	NSE: LTI	IT & Engineering	TASIS	Debt-to-asset ratio within limits
Avenue Supermarts (DMart)	NSE: DMART	Retail	Islamicly, Islami Investments	Passes sector & financial screening
Tata Consultancy Services	NSE: TCS	IT Services	TASIS	Common inclusion in halal equity portfolios

Key facts:

Screening is done on both sector activity and financial ratios (e.g., interest income <5%, debt <33%).
Reviewed by third-party Shariah boards like TASIS and tools like Islamicly & Biniyog.
Stocks are suitable for both direct investing and for inclusion in halal mutual funds or ETF strategies.
Retail investors can track compliance using platforms like Islamicly and Biniyog.

Halal ETFs and Index Funds

ETFs and index funds that follow Islamic principles offer Indian investors a simple, transparent way to build a Shariah-compliant portfolio. These funds track indices composed of companies that pass both financial and sectoral Shariah screens — avoiding interest-based finance, alcohol, gambling, pork, and speculation-heavy industries.

One of the few explicitly Shariah-labeled ETFs in India is Nippon India ETF Shariah BeES. It tracks the Nifty 50 Shariah Index, which excludes non-permissible sectors and applies additional financial ratio filters to ensure compliance with Islamic principles. The fund primarily invests in technology, healthcare, and consumer goods, with major holdings like Infosys, TCS, Sun Pharma, and Hindustan Unilever. Listed on the NSE and BSE, it offers intraday liquidity like any other stock. As of mid-2025, it manages assets of around ₹35 crore, with an expense ratio of 0.96%, slightly higher than average due to the cost of ethical screening.

While domestic options remain limited, Indian investors can also gain access to a variety of international Islamic ETFs:

Halal ETFs and Index Funds available to Indian investors
Fund Name / ETF	Provider	Index Tracked	Compliance Standard	Access Platform	Notes	Origin
S&P BSE 500 Shariah Index Fund	Not direct yet (index only)	S&P BSE 500 Shariah	Dow Jones / AAOIFI style	Reference for stock selection	Index can be used for manual screening	domestic / international
Nifty 50 Shariah Index (not an ETF)	NSE Indices	Nifty 50 Shariah	Internal NSE filters	Reference only	Benchmark for faith-compliant investing	domestic / international
Wahed FTSE USA Shariah ETF (HLAL)	Wahed Invest	FTSE USA Shariah	AAOIFI	Wahed app for Indian users	Global exposure to U.S. halal equities	domestic / international
SP Funds S&P 500 Sharia ETF (SPUS)	SP Funds	S&P 500 Shariah	Dow Jones Islamic	International brokers	USD-based, excludes haram sectors	domestic / international
iShares MSCI World Islamic ETF (ISWD)	BlackRock	MSCI World Islamic	MSCI Shariah screening	Global brokers like Interactive Brokers	Global equity portfolio with screening	domestic / international

Key facts:

Domestic Shariah-compliant ETFs are limited; Tata Ethical ETF is the main example.
Global halal ETFs (Wahed, SPUS, ISWD) can be accessed through platforms like Wahed or international brokerage accounts.
Shariah indices like S&P BSE 500 Shariah and Nifty 50 Shariah serve as excellent references even if not investable directly.
Passive investing with these ETFs ensures low costs, diversification, and faith alignment.
Ideal for long-term wealth-building with minimal active management.

Halal mutual funds

There are mutual fund schemes in India designed specifically for Shariah-following investors. These funds avoid interest-generating assets and stay away from sectors deemed non-permissible under Islamic law. If you're seeking Islamic investment options in India with active management, halal mutual funds can serve as a suitable choice. Our guide on best halal mutual funds in India covers the most popular options in this space.

Mutual funds in India
Fund Name	Type	Strategy	NAV/Unit (INR)	Annual Return	Management Company
Tata Ethical Fund	Open-end	Equity (Shariah-screened)	175.65	16.25%	Tata Asset Management
Taurus Ethical Fund	Open-end	Equity (Midcap Focus)	85.22	14.80%	Taurus Mutual Fund
ICICI Prudential Shariah Fund	Open-end	Equity (Screened Index)	31.47	11.95%	ICICI Prudential AMC
Mahindra Manulife Ethical Fund	Open-end	Equity (Balanced Approach)	28.50	13.40%	Mahindra Manulife AMC

Key facts:

All funds follow sectoral and financial Shariah screening guidelines.
Certified by bodies like TASIS, Islamicly, or internal Shariah boards.
Avoids exposure to banking, alcohol, tobacco, gambling, and conventional finance.
Retail-friendly options with SIPs starting as low as ₹500.
Audited periodically for faith compliance.

Sukuk bonds (Islamic bonds)

Sukuk offer a faith-compliant alternative to conventional bonds. Instead of earning interest, investors receive returns derived from profits tied to tangible assets. Those searching for the best Islamic way to invest money in India often turn to Sukuk, as they provide predictable returns without involving riba (interest). Learn more through our guide on Sukuk bonds in India.

Notable sukuk options accessible to Indian investors
Sukuk Name	Issuer / Fund	Tenure	Profit Rate (Indicative)	Structure	Sector / Purpose	Access Method
Franklin Global Sukuk Fund	Franklin Templeton	Open-end	~3.5%–5% (USD-denominated)	Ijarah / Wakala	Diversified global sukuk portfolio	Global mutual fund distributors
Wahed Sukuk Portfolio	Wahed Invest	Flexible	3%–4% expected	Mix (Ijarah, Wakala)	Global infrastructure & corporates	Wahed platform
HSBC Global Sukuk Fund	HSBC Global Asset Management	Open-end	~4% (past 12-month yield)	Ijarah	Government & sovereign sukuk holdings	HSBC India / international brokers
IDB Trust Services Sukuk	Islamic Development Bank	5–7 years	~2.5%–3.5% (USD-based)	Ijarah / Wakalah	Social infrastructure projects	Through qualified global brokers
BondbloX Islamic Bonds	BondbloX Exchange (Singapore)	Varies	Varies	Ijarah / Musharakah	Tokenized sukuk investing	BondbloX app for Indian users

Key facts:

Not currently issued domestically in India (no sovereign sukuk yet).
Available via global platforms (minimums from ₹5,000–₹25,000).
Most are USD-denominated, offering diversification and dollar exposure.
Profits are halal and tied to real asset productivity, not riba.
Ideal for conservative investors seeking faith-aligned fixed-income assets.

Gold and real estate

Physical gold and property have long been considered permissible under Islamic principles. Both are asset-backed, stable investment options that do not rely on interest. As part of a balanced halal portfolio, gold and real estate provide protection against inflation and support long-term capital growth.

Gold and property remain two of the most time-tested halal investment options for Indian Muslims. They are tangible, riba-free assets that align with Shariah principles when acquired and managed correctly. With the rise of digital platforms and Islamic financing models, investing in these assets has become more accessible and structured.

Halal ways to invest in gold

Not all forms of gold investment are equally compliant. Here's a comparison of common gold options in India:

Halal ways to invest in gold
Gold Option	Halal Status	Notes
Physical Gold (coins, bars)	Fully halal	Must ensure ownership and possession; best for long-term holding
Digital Gold (e.g., MMTC-PAMP, SafeGold)	Conditionally halal	Must be 100% backed by physical gold and deliverable
Gold ETFs (e.g., SBI, HDFC)	Controversial	Requires Shariah screening; some may include interest-bearing elements

Key tip: Prefer physical or digital gold with clear backing over speculative paper-based contracts.

Real estate in a halal portfolio

Islamic real estate investment in India is typically done through contracts like Musharakah (joint partnership) and Ijara (leasing). These structures avoid interest and ensure transparency in ownership and income.

Real estate in a halal portfolio
Real Estate Option	Shariah Compliance	Access Methods
Direct residential property	Halal if no riba	Use cash or Shariah-compliant finance (e.g., Musharakah model)
Rental income property (Ijara)	Halal	Structured lease models; no mortgage involvement
REITs (domestic)	Under review	Most are not yet Shariah-certified in India
Global Islamic REITs	With screening	Available via platforms like Wahed, ShariaPortfolio

Examples of halal-friendly real estate tools and platforms:

iFarmland India – crowdfunded agro-property investments based on Musharakah.
A Shariah-compliant farmland investment platform connecting Indian investors with agricultural projects through joint ownership models.
Grip Invest – peer-to-peer leasing (structured via ijara-like models).
While not explicitly Islamic, Grip offers asset leasing opportunities that can be evaluated for halal structure. Review each lease deal to ensure no riba involvement.
Wahed Real Estate Portfolios – access to global halal-screened REITs.
Wahed Invest provides exposure to U.S.-based income-generating properties through REIT-like portfolios screened for Shariah compliance.
MMTC-PAMP Digital Gold – digital gold with real-time physical backing.
Offers 24K pure digital gold fully backed by vault-stored physical gold. Includes home delivery and halal-compliant terms of ownership.

Islamic fintech & crowdfunding

A growing number of digital platforms in India now offer Islamic finance services, ranging from halal peer-to-peer lending to crowdfunding. These fintech innovations align with religious guidelines and expand access to modern Sharia based investments in India, making participation easier for younger, tech-savvy Muslim investors.

Islamic fintech is revolutionizing halal investing in India by offering accessible, tech-enabled solutions that align with Shariah principles. These platforms provide modern alternatives to conventional finance, allowing investors to participate in profit-sharing, halal lending, real estate crowdfunding, and digital Shariah screening — all while avoiding interest (riba), excessive uncertainty (gharar), and unethical sectors.

Key segments of Islamic fintech in India
Fintech Area	Description	Shariah Model	Popular Platforms
Halal P2P Lending	Facilitates profit-sharing or non-interest-based lending between users	Mudarabah, Qard Hasan	Biniyog India, Finladder (pilot)
Digital Shariah Screening	Real-time filtering of stocks/funds based on Islamic financial ratios	Screening Standards	Islamicly, Zoya (India access)
Halal Robo-Advisors	Automated Shariah-compliant portfolio management	Wakalah	Wahed, ShariaPortfolio
Property Crowdfunding	Investors pool funds into halal real estate or agri-projects	Musharakah	iFarmland, Ethis
Micro-Sukuk & Tokenized Assets	Low-barrier access to sukuk or physical assets via blockchain platforms	Ijara, Murabaha	GoldPesa, XDC-based sukuk apps

Benefits for Indian investors

Low minimums: start with ₹1,000–₹5,000.
Transparent contracts: based on profit-sharing and asset-backing.
Accessibility: apps and portals available in English and Hindi.
Smart tools: filter by sector, compliance level, or ethical score.

If you're looking to expand beyond halal investment options in India and explore a wider range of Shariah-compliant investment opportunities globally, there are several ethical options available. From international stocks and commodities to Forex and even crypto, many platforms now offer dedicated Islamic trading accounts designed to meet the principles of halal finance. These accounts are structured to avoid interest-based fees and speculative elements, helping you invest in line with your faith. If that resonates with your financial goals, explore the list of halal-friendly global platforms below to find one that matches your preferences.

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	6.79	Open an account Your capital is at risk.
RockGlobal	50	200		1.96	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
Plus500	60	100	FCA, CySEC, MAS, ASIC, FMA, FSA (Seychelles)	6.83	Open an account Your capital is at risk.

How to choose the best halal investment in India

Choosing the right option among the many halal ways to invest money in India starts with understanding the contract structure behind the product. Always look beyond labels like "Islamic" or "ethical." Ask whether the investment avoids riba (interest), gharar (excessive uncertainty), and maysir (speculation). A good first step is checking if the platform or fund is reviewed by a certified Shariah board. If you're looking at equity, study the debt ratios and revenue sources of the company. If it earns even a small portion from interest-based income, you may need to purify that portion, or skip the stock altogether.

To make a truly Shariah compliant investment in India, take time to assess how profits are generated. Does the model involve leasing, trading real assets, or genuine risk-sharing? Or is it just a repackaged conventional product? For example, in real estate, avoid projects with bank-funded development. Instead, choose REITs or direct investments that clearly state their funding sources and leasing partners. Platforms that offer mudarabah or wakala-based models with transparent reporting make it easier to stay compliant. Always cross-check with a Shariah advisor if in doubt, it’s not just about what you invest in, but how the entire structure works.

Halal investment option comparison
Option	Risk Level	Shariah Certification	Minimum Investment	Liquidity
Shariah-compliant stocks	Medium	Yes	₹1,000	High
Halal mutual funds	Medium	Yes	₹500	Medium
Sukuk bonds (Islamic)	Low	Yes	₹10,000	Medium-Low
Gold	Low	Not required	₹1,000	High
Real estate	Medium	Not required	₹100,000	Low
Islamic crowdfunding	High	Yes	₹1,000–₹5,000	Low

Key factors to consider

Shariah compliance (check for fatwas or certifications).
Risk level and volatility.
Historical performance.
Liquidity and time horizon.

Use peer-screened funds and micro-sukuk pools to build halal wealth in India

If you’re just beginning to explore halal investments in India, it’s better to ignore the flashy Shariah-approved labels and instead follow where experienced Muslim investors are actually putting their money. Some of the most truly faith-aligned funds are run by small groups who go beyond technical filters and apply personal, lived Islamic principles. These investments often include modest but steady businesses in areas like farming tech, clean industries, and home financing, sectors that stay naturally clear of interest and speculation. They don’t show up on big-name apps, but they thrive quietly in networks that focus on real values, not trends.

One more smart approach is joining micro-sukuk groups run by local trusts or online community pools. These aren’t big institutional bonds. They’re small, real-world projects like local farming, water supply upgrades, or equipment for honest small shops. The returns might not be flashy, but your money goes into something you can stand behind, both financially and spiritually. And if you’re also exploring passive halal income, you can combine these options with the best cloud mining service or a best crypto cloud mining setup that’s built on transparent, non-interest-based models.

Conclusion

Halal investing in India is no longer a niche concept, it is becoming a dynamic part of the country’s financial ecosystem. As more Muslim investors seek ethical ways to grow their wealth, the availability and variety of Shariah-compliant options continue to expand.

Today, Indian investors have access to a broad range of halal investment instruments, from Shariah-compliant stocks and mutual funds to Islamic ETFs, Sukuk bonds, real estate, gold, and emerging Islamic fintech platforms. Each option offers a different balance of risk, liquidity, and return potential, giving Muslim investors the flexibility to tailor their portfolios to their personal financial goals and risk appetite.

Importantly, halal investing is not just about avoiding prohibited sectors, it is about supporting businesses and industries that align with Islamic ethical principles and contribute positively to society.

As India’s halal finance market matures, we expect to see even more innovative solutions tailored to Muslim investors. With proper education, due diligence, and a clear investment strategy, anyone can build a successful halal portfolio that aligns both with their faith and financial ambitions.

FAQs

Can I open a halal investment account with a regular Indian brokerage?

Most Indian brokerages don’t specialize in halal products, but some offer access to Shariah-compliant stocks and ETFs. To stay compliant, you’ll need to manually screen stocks or use third-party Shariah screening tools.

Are halal investments in India eligible for tax benefits?

Yes, many halal options like equity mutual funds or Sukuk may qualify for tax deductions under sections like 80C. However, it depends on the product’s structure and classification, so always check with a tax advisor.

Is it halal to invest in companies with mixed revenue sources?

It depends on the percentage of non-compliant income. If interest or haram revenue is minimal (typically under 5%), some scholars allow investment after purifying that portion via charity. Always consult a qualified Shariah advisor for clarity.

Can NRIs invest in halal options in India?

Yes, Non-Resident Indians can invest in halal options like Shariah-compliant stocks or mutual funds, but they should ensure the platform allows NRI participation and the product is properly certified.

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