Best Halal ETFs In India (2025)

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As of 2025, one of the few Shariah-compliant ETFs available to Indian investors is the Nippon India ETF Nifty 50 Shariah BeES, which tracks a screened version of the Nifty 50 Index. It focuses on companies that meet Islamic guidelines, excluding sectors such as alcohol, gambling, and conventional finance. For broader diversification, investors may also explore international options, though these are not listed locally and come with added considerations. Those looking for a reliable halal ETF in India often begin with this fund, as it combines compliance with market familiarity.

Among all the available halal investment options in India, the number of ETFs and index funds that follow Islamic principles remains limited. Creating a compliant portfolio means closely examining how a fund is structured, where returns come from, and whether it avoids prohibited income sources. While halal index funds in India are still uncommon, investors can turn to third-party Shariah screening tools to assess permissibility. Asset classes like stocks, gold, and silver can be included with proper filtering. Given this, many continue to ask whether an ETF is halal or haram in India, and the answer lies in understanding the fund’s composition and ensuring it aligns with religious standards.

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 a halal ETF in India and how does it work?

Halal ETF in India

An Exchange Traded Fund (ETF) is a marketable security that tracks an index, sector, commodity, or asset and trades like a stock on the exchange. ETFs combine the diversification benefits of mutual funds with the flexibility of stock trading. Investors can buy or sell them during market hours at real-time prices, making them liquid and cost-effective. In India, ETFs have gained popularity for their low expense ratios, passive management, and transparency.

ETF vs mutual fund: What’s the difference?

Both ETFs and mutual funds allow investors to pool money into diversified portfolios, but they differ in how they're bought, sold, and managed. Mutual funds are priced once daily at NAV (Net Asset Value) and are transacted through fund houses. ETFs, on the other hand, are traded like stocks throughout the day on the exchange, with prices fluctuating based on market demand and supply.

Another key difference lies in cost and transparency. ETFs usually have lower expense ratios, often around 0.05% to 0.3%, while mutual funds can go up to 2% or more in annual fees. Additionally, ETF holdings are published daily, offering more visibility to investors. For Muslims seeking halal investment routes, this makes ETFs easier to screen for Shariah compliance.

What makes an investment halal?

For an investment to qualify as halal or Shariah-compliant, it must follow Islamic finance principles:

The business must not deal with prohibited (haram) industries such as alcohol, gambling, pork, conventional banking, or entertainment.
The company must maintain low interest-based income and debt levels. Typically, a firm's debt should not exceed 33% of its total assets.
Investments should avoid speculation (gharar) and ensure underlying assets are tangible or real.

Shariah compliant index funds in India are reviewed by Shariah boards that screen companies based on sectoral involvement and financial ratios. A halal fund will typically exclude banks, NBFCs, insurance firms, and other financial institutions.

Halal ETF in India

If you're wondering which ETF is halal in India, the answer is clear. Nippon India ETF Shariah BeES is currently the only Shariah compliant ETF in India. It mirrors the Nifty50 Shariah Index, which filters out companies that violate Islamic investment norms.

As of mid-2025, this Islamic ETF in India had over ₹35 crore in AUM. Many investors consider it the best halal ETF in India because of its structure, transparency, and strict adherence to Islamic finance principles.

India has over 120 ETFs across equity, debt, and thematic categories. However, most are not suitable for Shariah-conscious investors. That’s because they often include non-compliant sectors like conventional finance, tobacco, or gaming. This is why there is only one Shariah index fund in India that exists in an ETF structure.

That said, Shariah compliant index funds in India also exist in mutual fund format. At least three major halal mutual funds are offered by firms such as Tata Asset Management and Taurus Mutual Fund. These funds apply the same Islamic screening rules but are not listed on stock exchanges and are priced once per day.

So while halal investment options do exist, the ETF space is still limited. For investors seeking a liquid, transparent, and compliant vehicle, Nippon India ETF Shariah BeES remains the only Shariah compliant ETF in India as of now.

Nippon India ETF Shariah BeES

Nippon India ETF Shariah BeES offers investors a way to gain equity exposure while following Islamic principles. The fund is listed and actively traded on both the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), allowing investors to buy and sell it throughout the trading day like any other stock.

The ETF tracks the Nifty50 Shariah Index, which is a filtered version of the standard Nifty50 Index. It removes companies involved in non-permissible activities such as banking, gambling, alcohol, tobacco, and interest-based finance. In addition, the index applies financial ratio screens to ensure companies maintain low levels of debt and interest income. As a result, sectors like technology, healthcare, and consumer goods make up the majority of the fund’s portfolio.

Its top holdings include large-cap companies such as Infosys, TCS, HCL Technologies, Sun Pharma, and Hindustan Unilever. As of mid-2025, the fund manages assets worth approximately ₹35 crore and has an expense ratio of around 0.96 percent. While this is slightly higher than the cost of standard ETFs, it reflects the added screening and compliance processes involved.

The structure of the ETF ensures transparency, with daily disclosure of holdings and live market pricing. It provides an accessible and regulated option for investors who want to invest in Indian equities without compromising on their ethical or religious beliefs. Unlike mutual funds, which are priced only once a day, this ETF offers the flexibility of intra-day trading and real-time price discovery.

For investors looking for a simple, rule-based product that aligns with Islamic investing values, Nippon India ETF Shariah BeES stands out as a practical and efficient solution. Despite being the only Islamic ETF in the Indian market, it has maintained consistent performance and continues to attract interest from both retail and institutional investors.

Nippon India ETF Shariah BeES features
Feature	Details
Listed on	NSE: SHARIABEES; BSE: 590109
AUM	₹30–38 Cr (2025)
Expense ratio	0.96%
Equity exposure	99.86%, mainly large‑caps
Top sectors	Technology (~50%), Healthcare, Staples
Top stocks	Infosys, TCS, HUL, Sun Pharma, HCL
Performance	23.7% (1 yr), 15.7% (5 yr CAGR), ~13–14% since inception

Gold ETF in India

A gold ETF is a fund listed on a stock exchange that represents ownership in physical gold, with each unit typically tied to one gram of high-purity bullion. Unlike typical equity ETFs, which hold baskets of stocks or bonds and track an index, gold ETFs track the metal’s spot price. This means investors gain direct exposure to the price of gold without the need to store or secure the physical asset themselves.

For a gold ETF to be considered halal, it must meet several specific criteria:

Fully backed by physical bullion. Shariah compliance requires actual gold stored in vaults, not derivatives or paper-based contracts.
Purity levels. The underlying gold should be at least 99.5% pure, aligning with international bullion standards.
No interest-generating mechanisms. The ETF should not engage in lending, financing, or margin trading.
Transparent storage and segregation. Gold should be held in dedicated accounts and segregated from the ETF provider’s other assets, with vault audits.
Regular and verifiable audits. Independent, periodic audits must be published to confirm that the physical gold and stated holdings match.
Reasonable expense ratios. Fees should be modest (preferably under 0.6%) and in accordance with fairness under Shariah principles.
No leverage or speculative structures. The fund must avoid using borrowed capital or speculative derivatives to influence returns.

Below are five of India’s largest gold ETFs that meet these halal screening criteria:

Largest gold ETFs in India
ETF name	Physical backing	Purity ≥99.5%	No interest	Segregated storage	Regular audits	Expense ratio
Nippon India Gold BeES	Yes	Yes	Yes	Yes	Yes	~0.50%
SBI Gold ETF	Yes	Yes	Yes	Yes (LBMA-certified)	Yes	~0.65%
HDFC Gold ETF	Yes	Yes	Yes	Yes	Yes	~0.60%
Kotak Gold ETF	Yes	Yes	Yes	Yes (Deutsche Bank)	Yes	~0.60%
UTI Gold ETF	Yes	Yes	Yes	Yes	Yes	~0.45%

Top gold ETF performance history in India

As of June 2025, Nippon India Gold BeES remains a market leader with a strong one-year return of approximately 31.6% and the highest assets under management (AUM) in the category at ₹20,783 crore, reinforcing its status as a go-to choice for passive gold investors.
HDFC Gold ETF continues to lead the gold ETF segment. With an AUM of around ₹9,845 cr and an expense ratio of 0.59%, it delivered a strong one‑year return of approximately 33.5% (trailing 12‑month returns between 31–34%)
SBI Gold ETF has outperformed its peers with a 1-year return of around 33.15% and a substantial AUM of ₹7,719 crore, offering reliable exposure backed by LBMA-compliant vaulting.
Kotak Gold ETF delivers a solid return of about 31.85% while managing ₹7,437 crore in assets, paired with a low expense ratio of 0.55%, appealing to value-focused investors.
UTI Gold ETF stands out for delivering the highest one-year return at 34.9%, despite having a smaller AUM of ₹1,983 crore. It also boasts the lowest expense ratio in the group at just 0.50%, making it a smart pick for cost-conscious investors seeking strong performance.

All these ETFs track the price of gold closely and provide exposure to physical bullion without involving interest-based income or speculative instruments. Their underlying assets are regularly audited, securely stored, and free from leverage, making them ideal vehicles for investors seeking Shariah-compliant access to gold.

Silver ETF in India

A silver ETF is a type of exchange-traded fund that invests in physical silver stored in secure vaults and tracks its real-time market price. Each unit typically represents one gram of 99.9% pure silver. It differs from standard ETFs, which hold baskets of equities or bonds, and even from gold ETFs, which focus on tracking the price of gold. Silver ETFs are more volatile due to silver's dual nature as a precious and industrial metal, often offering different diversification benefits.

For a silver ETF to be halal, it must follow strict Shariah guidelines. Below are the essential compliance factors:

Physical backing only. The ETF must hold real, tangible silver, not futures or synthetic contracts.
High purity standard. The silver must be at least 99.9% pure to qualify as halal.
No interest-based income. The fund should avoid fixed-income instruments, leverage, or margin financing.
Segregated and verified storage. The silver must be stored in separate, secure vaults with clear ownership for unit holders.
Audited holdings. The fund must be independently audited regularly, and reports should be publicly available.
Fair and modest fees. Expense ratios should be reasonable and not exploitative, typically under 0.6%.
No speculative instruments. The fund must avoid using derivatives, options, or leveraged positions.

These five silver ETFs meet the key halal screening standards based on physical assets, purity, transparency, and ethical structure:

Largest silver ETFs in India
Silver ETF	Physical backing	Purity ≥99.9%	No interest/leverage	Vault storage	Regular audits	Expense ratio
Nippon India Silver ETF (SILVERBEES)	Yes	Yes	Yes	Yes	Yes	0.56%
ICICI Prudential Silver ETF	Yes	Yes	Yes	Yes	Yes	0.40%
Kotak Silver ETF	Yes	Yes	Yes	Yes	Yes	0.45%
SBI Silver ETF	Yes	Yes	Yes	Yes	Yes	0.42%
HDFC Silver ETF	Yes	Yes	Yes	Yes	Yes	0.40%

As of June 2025, the Nippon India Silver ETF holds its position as the largest player in the silver ETF space, with an AUM of ₹6,276.97 crore and a strong one-year return of approximately 18.96%. Its expense ratio stands at about 0.56%, offering a balanced mix of scale, liquidity, and performance. The ICICI Prudential Silver ETF slightly edges ahead in returns, delivering a leading one-year performance of around 19.31%. It also maintains a competitive expense ratio of 0.40%, paired with an AUM of ₹5,333 crore, making it one of the most cost-efficient options in the category.
Kotak Silver ETF offers a one-year return of 17.31%, backed by ₹1,221 crore in assets and an expense ratio of 0.45%. Its consistent performance and audit transparency make it a reliable pick for steady exposure. Meanwhile, the HDFC Silver ETF impresses with a return of approximately 18.62%, supported by an AUM of ₹702.56 crore and one of the lowest fees in the segment at 0.40%, catering to cost-conscious investors seeking dependable returns.
Lastly, the SBI Silver ETF (FoF) stands out for its full physical backing of silver holdings, with ₹329 crore in AUM. While smaller in scale, it appeals to those prioritizing asset-backed investments aligned closely with silver price movements.

How to screen for halal ETF in India

Unlike some international markets, India currently has no official or government-mandated certification system to verify whether an ETF is halal. Fund houses are not required to declare their products as Shariah-compliant, which means the responsibility often falls on the investor to perform their own due diligence.

The examples mentioned earlier, whether gold, silver, or equity-based ETFs, are technically halal based on their underlying structure. These ETFs are backed by physical assets, avoid interest-bearing instruments, and follow transparent storage and audit practices. However, because formal Shariah boards are not attached to these funds, investors should verify the fund’s portfolio and policy documents before investing. This includes reading the scheme information document, checking sector allocations, and ensuring there’s no exposure to prohibited industries or financial instruments.

For added clarity, you can also submit a direct query to the fund house, asking whether the fund uses interest-based derivatives, engages in securities lending, or contains non-compliant assets. While tools like Zoya, HalalStock, or Islamicly can provide a first-level screening, independent research is strongly recommended to ensure your investments align with your values.

If you're open to looking beyond halal ETFs in India, there are other Shariah-compliant investment paths to explore. From equities and stocks to crypto and Forex, many brokers now provide Islamic trading accounts that follow ethical finance principles and steer clear of interest. These options help you grow your wealth while staying true to your values. If that sounds like the right fit, check out the list of halal investment platforms below and choose the one that suits your needs.

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.

If you’re looking for more investment options specific to India, you may refer to our guides:

Halal stocks in India.
Sukuk bonds in India.
Halal mutual funds in India.

Invest smartly in India by tracking fund purity and rebalancing windows in halal ETFs

Most people think a halal ETF just avoids interest-based or unethical sectors, but there’s a deeper layer many overlook. A lot depends on how often the ETF checks and adjusts its holdings. Some stocks may meet Shariah rules when they’re added, but later drift out of compliance. If the fund doesn’t rebalance regularly, your investment could quietly slip out of halal territory. That’s why tracking how and when a fund updates its portfolio is just as important as knowing what’s in it.

Also, look closely at whether the fund tells you how much of its earnings are considered impure and need to be donated. This isn't just a box to tick, it gives you a clearer picture of how ethically sound your profits are. Investors who are serious about Shariah compliance go beyond returns and ask how much of their gain is fully clean. That’s what makes halal investing more than just a label, it becomes a conscious financial choice.

Conclusion

The halal ETF market in India offers limited options, but it allows for building a basic portfolio in line with Shariah principles. Available instruments cover equities, gold, and silver, provided their structure and revenue sources meet compliance standards. The core selection criteria include business activity filters, thresholds for impermissible income, and the absence of speculative mechanisms. Investors should rely on fund documentation and external screening tools to verify compliance. Each decision is based on asset composition, ownership structure, and the fund manager’s operating model. Within current constraints, it is possible to assemble a diversified set of ETFs with acceptable religious alignment.

FAQs

Can I use a regular brokerage account to invest in halal ETFs?

Yes, as long as the broker provides access to ETFs that meet Shariah standards. You must verify the fund’s asset composition and structure yourself before investing.

How often should I check if an ETF remains halal after purchase?

It's recommended to review the ETF at least quarterly. Portfolio rebalancing may introduce non-compliant holdings, so periodic screening is necessary.

Is it acceptable to hold ETFs with a small percentage of haram income in a halal portfolio?

It may be acceptable if the haram income stays below standard thresholds (typically 5%) and purification is done through charitable giving. Documentation and tracking are required.

Are currency risks allowed in halal ETF investments?

Currency risk is permitted as long as there is no speculation or margin use. It’s considered a market factor, not a compliance issue under Islamic finance.

Team that worked on the article

Alamin Morshed is a contributor at Traders Union. He specializes in writing articles for businesses that want to improve their Google search rankings to compete with their competition. With expertise in search engine optimization (SEO) and content marketing, he ensures his work is both informative and impactful.

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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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