Since the heyday of the British Raj, India's Intelligence Bureau has been watching over all those myriad internal threats to the security of the citizens, who now number 1.2bn, of perhaps the most varied country in the world. Yet for all the vaunted secularism of the world's largest democracy, the IB, in its 125-year history, has never been led by a Muslim.

Until now. The appointment of 59-year-old Syed Asif Ibrahim as the IB's director has predictably raised eyebrows, particularly as other marginally more senior candidates were overlooked. In the intensely hierarchical Indian bureaucracy, the exact year an official passed the demanding exams at the start of his career is crucial. Some journalists have speculated that Ibrahim was appointed by the current government, led by the Congress party, because he is broadly sympathetic to a political organisation that has always been seen as supportive of Indian Muslims.

Ajit Doval, who led the IB from 2004 to 2005, says this is nonsense. "I worked with [Ibrahim] for 20 years. The media haven't got anything else to say so they are focusing on if he is Christian, Muslim, Hindu, whatever. He's a career intelligence officer and a very fine one," he says. "The Indian system is really a very secular one so this is a non-issue."

Except it isn't. Some Indian Muslims have greeted the appointment as a breakthrough. Successive government inquiries have shown that Muslims, who constitute around 14% of the population but are significantly underrepresented in the nation's security agencies and forces, are among the most disadvantaged communities in India.

The job of the IB is varied. There is the obvious threat of Islamic militancy. News of Ibrahim's appointment broke only a few days after the only surviving gunman from the November 2008 terrorist attacks in Mumbai was hanged. That operation was the work of Pakistani-based extremists but homegrown militant groups are still active. Then there is the ongoing if improving conflict in Kashmir, widespread leftwing extremism and political violence. The IB chief is likely to be consulted by Congress party strategists as national polls scheduled for 2014 approach.

An evident economic slowdown, and a drifting government, have undermined the confidence of emerging India recently. But Ibrahim's appointment shows how minorities of all types – caste or religious – are making steady if slow progress in overcoming centuries of prejudice. "The IB's religion is serving our people and our country," says Doval, the former chief spook. "I'd like to say more about the new director and the service, but I'm afraid it's all classified."