On July 11, NSE Indices launched Nifty500 Ahimsa Index. Less than a month earlier, on June 17, BSE had rolled out Saatvik 100 Index. But the concept of ethical investing has been around for a long time. Venus Jewel chairman-co-founder Sevantilal Shah, my guru on the markets, would mildly chide me when I broached the subject of buying into East India Hotels: 'Aapra thi noh layvaai.' (We're not supposed to buy.) The reason: the company served liquor and non-vegetarian cuisine.
Muslim investors would not invest in ITC, however strong the recommendation. Bohra investors would screen out all companies that borrowed and paid out interest. Whenever the subject of aquaculture investing came up, my previous employer would say, 'Beeju kai?' (Anything else?)
This investing strain now finds articulation: two exchanges, and two ethically-anchored benchmarks, weeks from each other. It may be a coincidence of timing but not of intent. These stock exchanges have done something no other major emerging market has attempted at this scale: build an investable index around a civilisational value, rather than a borrowed economic template.
Why this matters is to place this against the world's existing catalogue of values-based investing. Shariah-compliant indices remain the largest and most mature category. FTSE Shariah Global Equity Index Series alone spans 48 countries and more than 17,000 compliant stocks, alongside parallel families from S&P, MSCI and Dow Jones, all screening out interest-based finance, alcohol, gambling and pork products.
Ahimsa and Saatvik indices, therefore, sit in an interesting seam between these categories. They borrow the exclusionary, rules-based architecture of ESG-investing, but root it in an indigenous ethical tradition - ahimsa, or non-violence, drawn from Jain, Hindu, Buddhist and Sikh thought, with a civic lineage running from Ashoka's edicts to Gandhi's deployment as political philosophy.
Most faith-based indices abroad serve a religious community's mandate. Ahimsa index is different - as an ethical positioning available to any investor, Indian or non-Indian, who seeks to invest in companies that do not profit from alcohol, tobacco, gambling, meat, poultry, leather and pesticides.
Built in partnership with Ahimsagain Foundation and its Ahimsa Investment Movement framework, the index classifies Nifty 500 companies as green, orange or red - aligned, moderately concerning, or significantly implicated in harmful practices - admitting only those rated green.
Drawing from the full Nifty 500 allows the index to reach into large-, mid- and small-cap territory. Its base date is April 1, 2016, its base value is 1,000, and it undergoes semi-annual reconstitution to contemporise the classification (as companies improve or retreat).
Why does this land differently in India than a translated Western ESG framework might? Because ahimsa was never an import. It is foundational to four major faith traditions here, and India has large, financially consequential communities for whom non-violence toward living creatures is a lived principle - simply one that lacked, until now, a formal financial instrument to act upon. That is a legitimacy no imported framework can manufacture overnight.
The commercial logic follows. For investors, it offers a low-cost, rules-based way to align a portfolio with ethical criteria without researching every constituent company individually - cheaper than prominent actively-managed ethical funds, and broader than narrower thematic products because it fishes in the full Nifty 500 pool.
For companies, inclusion becomes a credibility signal that can draw ethically motivated and ESG-adjacent capital, potentially lowering cost of capital for compliant firms, while creating a live incentive to remediate - moving from orange to green - rather than merely reporting metrics in a passive way.
For the exchanges, this represents product innovation with a licensing and exchange-traded fund (ETF) revenue stream attached, timed against a backdrop where global sustainable-fund assets already run into trillions and continue to grow, and where thematic funds are running into rough weather.
Initial return data suggests deeper Ahimsa and Saatvik screening has outperformed broader benchmarks, plausibly because practice-level screening catches hidden liabilities - regulatory overhangs and supply-chain reputational risk - that a blunt industry-code exclusion would miss. It echoes a wider pattern: comparative studies of five major Shariah indices found that they all outperformed S&P 500 on a risk-adjusted basis in the short term, suggesting strict ethical screening can carry a moral dividend in the form of smaller drawdowns.
Here is where it gets interesting. ESG and values-based indices worldwide have faced a fair charge of 'screening theatre' - exclusions that look rigorous on paper, but with excluded companies finding other willing investors elsewhere. Besides, ahimsa, as a lens confined to harm against living beings, is narrower than the widening ESG concerns of the world.
Where this concept goes next is even more interesting. Other Indic concepts - seva, swadeshi and informal community-specific frameworks - are natural candidates for their own indices. Internationally, other markets with strong indigenous ethical traditions have a template to study, whether through Buddhist-influenced screens in Southeast Asia, or through a broadening of existing Shariah frameworks.
The real constraint, though, is unlikely to be investor appetite, which is already large and growing. It is the harder, less glamorous work of finding credible, well-governed rating bodies willing to do the classification rigorously. Index mechanics are the easy part; governance behind them is not. Hum dekhenge.
