Developing a Digital Framework for Impure Income Calculation for Indian Capital Market Participants

India’s capital-market regulator, SEBI, is relatively more receptive to Shariah-compliant products than RBI (banking) and IRDAI (insurance). India already offers three Shariah-compliant mutual fund schemes, along with PMS and AIF options, while NSE and BSE provide multiple Shariah indices. With over 2,000 listed Shariah-compliant stocks—even under stringent screening norms—India’s universe is larger than the combined Shariah-compliant listings of several Muslim-majority countries. Key screening thresholds (debt and interest-income ratios) used by NSE/BSE are more stricter than AAOIFI. Despite growing awareness and improving participation among Indian Muslims, a major barrier remains: investors lack publicly available guidelines and easy-to-use impure-income (purification) calculators from exchanges or AMCs, creating fear of mixing halal and non-halal earnings. Global research on purification methodologies is limited, and existing tools are either product-specific, paid, or lack transparency. This project proposes developing an India-specific purification methodology using 10 years of historical data and launching a free public digital calculator to strengthen Shariah-compliance practice and investor confidence.

Hamad Bin Khalifa University (HBKU)