This paper aims at studying customer preference towards Islamic banking products in Indian context. The purpose of highlighting these issues is to draw the attention of policy makers, regulators, researchers and consumers so as to re-assess the scope and feasibility of Islamic banking in Indian scenario. The data was collected from various districts of Bihar, Himachal Pradesh and Punjab. The study used factor analysis and perceptual mapping techniques. Religious binding, increasing disposable income and growing emphasis on financial inclusion creates huge scope for Islamic banking in India provided needful amendments in banking legislations. It was concluded that majority of respondents were not aware about interest free mechanism. The following study identified that factors like prioritized option for financial need, structure of Islamic banking, awareness level about Shariah law, requirement of Islamic banking products strongly affect the perception of the consumers.