The following information has been summarized from this Islam-Watch article by T. Omar Moros:
A writing known as “Muhammad’s Final Sermon” which is often used by Islamists and apologists to portrait Muhammad as having a universal and peaceful attitude toward other cultures has been revealed to be a pseudo-Islamic hoax that had likely been written and passed off as being genuine hundreds of years ago by an anonymous Indian cleric who wanted to “enhance Islam.”
The most popular quote from the sermon is as follows:
“All mankind is from Adam and Eve, an Arab has no superiority over a non-Arab nor a non-Arab has any superiority over an Arab; also a white has no superiority over a black nor a black has any superiority over white except by piety and good action …” (See the full text of the writing.)
The text surfaced when it was translated into English by Syed F. H. Faizi in 1991, leading to it becoming very popular while assumed to be real despite the fact that it was not legitimately sourced. However, research by T. Omar Moros shows the origin of the writing is likely due to it being forged by an anonymous cleric in India sometime during the three centuries of British colonialism in order to “enhance Islam” to help “undermine the racial, ethnic and caste systems that oppressed them.”
Following are excerpts from Moros’ full article:
“[Faizi’s] version—oddly, there are more than one—is being used today to cast Islam as a universal, peaceful faith, instead of—as critics argue—a violent, deceitful, Arab-centric ideology used by powerful clerics to control the masses.”
…
“I was finally able to track down the origin of the translation from a cryptic ‘Faizi 145’ reference; the only one among dozens of postings I checked. … Yet, even Faizi does not provide his source. Highly unusual, considering how popular this version is with modern Muslims.”
“Faizi gives us as close to a source as he could when he describes in the introduction to Sermons how he translated and published a collection of obscure writings into English…”
“[Faizi wrote about his translation:] ‘… They were not available in the form of Khutbas but have been derived from various books of Ahadith and history. .. the authenticity of the texts thereof is still doubted by ulema. …’”
“In other words, Faizi said ‘derived’ sermons from various unnamed books not accepted by the ulema (scholarly Muslim clerics). He does not know the original sources, but welcomes readers to help in his search. As a reader of Faizi, I’m happy to take a swag at it. …”
[Moros’ theory is as follows:] “It is well known that over the centuries, especially on the periphery of Islamic civilization, in places like India, a great deal of bogus religious material was generated. Even the Caliphate is known to have generated many bogus ahadith to legitimize its political claims. For more than three centuries while Britain ruled India, anti-colonial Indians, including Muslims, were very interested in finding significant sources of inspiration that would undermine the racial, ethnic and caste systems that oppressed them. This era also saw the black/white racial dynamic and the Arab identity being introduced into language. It is, therefore, no great leap to surmise that an inspired young Muslim cleric would decide to enhance Islam, by writing a bit of historical fiction in order to achieve a practical result. Who in pre-Internet, pre-electric India would know? A complete collection of authenticated ahadith was as rare as a magic carpet in colonial India. It wouldn’t be the first time someone wrote phony Islamic tracts; not by a long shot. Maybe our cleric even thought, ‘Well, if I must be Muslim (apostates are killed), then I’ll make it more suitable to me’–the old ‘change from the inside’ strategy at work.”
“In lieu of hard evidence, I believe this scenario is more plausible than the fish tales Islamists routinely employ to explain ahadith. … At least two other versions are also used, but do not mention race at all.”
…
“Islamists, in keeping with their insecure habit of finding Muslims at the root of every major innovation, including the airplane and golf, market the Last Sermon to the left as the world’s first Charter on Social Justice. Yet the version they most promote, without sources, effectively dates to 1991. In the end, it doesn’t matter when it was published, or if it is a fraud. The proof is in the headlines. Today, as this is written, Hamas killed the leader of a rival jihadist group, a Muslim in Ohio threatened to kill his apostate daughter, the Taliban claimed responsibility for bombing NATO’s Kabul headquarters, and sharia law has failed to deliver equality and accountability to northern Nigeria. Slow day—is it Ramadan?”