I am sorry for not being clear. \index{} may have to be used inline in
a para since the index has to pick up the right page where a term
appears. So you want to put it as close as possible to the keywords.

So put it as close as possible to the keywords:

--8<---------------cut here---------------start------------->8---
This section needs to index some
#+INDEX: multi word term
multi word terms.
--8<---------------cut here---------------end--------------->8—

Yes, I did not think one could put them in the middle of text like this. This should be fine except that having lots of these in the middle of paragraphs would make the text much more difficult to read. But I guess one has to have some compromise somewhere :)

Thanks and cheers.

Vikas