New Delhi, June 25: It may be a downhill journey for the sensex but for India’s rising Muslim middle class, Islamic investment opportunities in the stock markets are turning out to be the next big thing.

“Investment analysts and clerics are promoting the concept of Shariat compliant Islamic investment and its spin-off Islamic index,” said Vinita Jain, head of research with Eastwind Capital Advisors, which has tied up with the Indo-Arab Economic Co-operation Forum to launch an India Islamic Index. The index will be used by institutional and individual investors around the world for portfolio management and benchmarking purposes.

Earlier, indexes have been launched privately by brokerages, including Ahmedabad-based Parsoli Corporation.

Analysts say these indexes are becoming popular among the Muslim middle class and Gulf-based investors looking for Shariat-compliant investment options.

However, Jain said the India Islamic Index was the first one to be created in collaboration with clerics associated with the Indo-Arab Economic Co-operation Forum, which has many Muslim ministers, ambassadors from Gulf countries and top bureaucrats as members.

Shariat not only prohibits earning interest from lending but also shuns investments in banks, financial institutions, insurance and liquor companies and firms related to the media and entertainment segment.

“Indian Muslims have grown in numbers and in economic importance in recent years. Roughly they account for about 30-40 million people,” said Neshat Qaiser, who teaches sociology at Jamia Millia Islamia.

Analysts believe that this population, which is keen to make investments in India, can account for about a trillion rupees. They added that Islamic investments worth about $600 billion were locked up in fixed deposits around the world, waiting for an attractive, but ethical, market to invest in.

A significant portion of Arab investments also flow into the Pakistani and the UAE markets. With a dedicated Shariat index in place and some regulatory steps, the Indian securities market can open the floodgates on Islamic investments.

“Besides the traditional high-caste Muslims, who were always counted as wealthy and part of the middle or upper class, the Ansaris, Kalwars and the Querishis have emerged as middle class Muslims, banking on their new found business success,” said Qaiser, adding that many of these people have buttressed their claim to be part of the middle class with educational accomplishments.

“We are targetting to garner about $750 million to $1 billion in investments from about 150-175 foreign institutional investors ,” Jain added.