The woman, who has not been identified, was walking in the city's Fifth avenue, which houses top luxury brands, Saturday night when an unidentified person set her blouse on fire using a lighter.
The New York chapter of the civil rights group Council on American-Islamic Relations (CAIR-NY) condemned the attack, which is the latest in a series of attacks on Muslims in the state and nationwide in recent days and months.
The victim felt heat on her arm, realising her blouse had been set on fire.
"She saw (the suspect) pull a lighter away and walk away," a source said in the New York Daily News.
The victim put out the flames on the sleeve of her blouse and was not hurt in the attack. The suspect, who reportedly did not say anything during the attack, remains at large.
The NYPD Hate Crimes Task Force is trying to determine a motive for the attack.
"We are clearly seeing a spike in attacks on individual Muslims and Islamic institutions in New York and around the country, which should be of concern to all Americans," said CAIR-NY Executive Director Afaf Nasher. "It is time for the mayor and the NYPD to put forward the necessary resources to investigate and prevent these attacks on the Muslim community."
Earlier this month, 60-year-old Nazma Khanam, a native of Bangladesh, was stabbed to death near her house in Queens.
Khanam was also wearing Islamic attire at the time of the stabbing.
CAIR said it has noted a spike in anti-Muslim discrimination and hate crimes in recent months, which the civil rights groups attributes at least in part to Islamophobic rhetoric used by various public figures.
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