Shariah compliant India Islamic Index launched to tap Gulf investors

New Delhi, June 25 : To make investment moral and ethical and to attract Gulf based investors, the India Islamic Index comprising of Indian publicly listed companies which are Shariah compliant, was launched today.

The Eastwind Capital Advisors Pvt Ltd., the Indo-Arab Economic Forum and Institute of Objective Studies launched the EW India Islamic Index at the India International Centre here.

The EW India Islamic Index comprises only of Shariah compliant companies equity and excludes companies engaged in alcohol products, pork-related products, conventional financial services like banking and insurance, gambling, hotels and all other business which the Shariah supervisory board considers as unethical.

EW India Islamic Index will be used by institutional and individual investors around the world for portfolio management and benchmarking purposes, as well as to serve the basis for structured products and other investment vehicles like ETFs.

It will also be useful for Indian banks and other financial service firm who are planning to get into financial product distribution and intermediation in Gulf countries.

Speaking at the launch ceremony, Delhi Chief Minister Sheila Dikshit said that the India Islamic Index is a way for the future financial institutions and corporate houses to utilise the assets in an ethical and transparent manner.

Former Chief Justice of India A M Ahmadi said that Riba (prohibition of interest) is forbidden in Islam for ethical and moral reasons.

"It is said that to lend money on interest or to receive money on interest is a sin therefore Muslims should avoid Riba," he added.

He lauded the concept of the India Islamic Index, and said it will provide an opportunity to small investors.

Concerns of probable slow down in developed economies followed by credit crunch in the US has shifted the focus of Gulf based investors to India and China, Shailendra Kumar, CEO of the Eastwind Capital Advisors Pvt Ltd.

"Appropriate enabling institutions and products need to be developed and aggressively pursued in India to attract this large pool of investments which will be upward of 1trillion dollars by 2010. EW India Islamic Index is launched to fulfil this expectation," he added.

The index will attract faith based investment guided by Shariah principles and will be transparent in nature, Kumar said.

The index will help in tracking the investment potential in India. The EW India Islamic Index is a subset of EW All Share Index which has a market capitalisation of Rs.55, 56,880 crore that is 99.5 percent pf the total market capitalisation of India.

The EW All Share Index consists of 1425 companies from 10 sectors and 85 different sub-industries. By Praful Kumar Singh

ANI