Foreign assets rise 24% as US equities remain the biggest destination for Indian mutual fund investments.
Indian mutual funds increased their exposure to overseas markets during FY2026, with total foreign assets rising nearly 24% to $10.2 billion by March 2026. The increase was largely driven by stronger investments in overseas equities, particularly US stocks, according to the Reserve Bank of India’s annual Survey of Foreign Liabilities and Assets of Mutual Funds. The data covering 53 mutual funds and their asset management companies showed that overseas equity holdings increased 37.5% year-on-year. Holdings rose to ₹93,602 crore in March 2026 from ₹68,072 crore a year earlier.
The US continued to dominate Indian mutual funds’ overseas equity exposure. American investments accounted for 63.5% of total foreign equity holdings, with US equity investments rising 36.5% to ₹59,403 crore during the year. Luxembourg and Ireland followed as the next major destinations, accounting for 20.2% and 10.7% of overseas equity holdings, respectively.
Exposure to Canada and China also rose.
While the US remained the primary market, Indian mutual funds also increased their exposure to several other international markets. Equity holdings in Canada rose sharply by 416.3%, although the increase came from a relatively small base. Investments in mainland China increased 52.2% over the same period.
The figures indicate that overseas mutual fund investments aren’t limited to a single market, even though the US continues to account for the largest share of foreign equity exposure.
Foreign liabilities increase at a slower pace.
The growth in overseas assets was accompanied by a more modest rise in mutual funds’ foreign liabilities. These liabilities increased 3.3% to $31.5 billion, or around ₹2.98 lakh crore, at the end of March 2026. A major factor behind the increase was the higher market value of mutual fund units held by non-resident investors. Such holdings rose 14.2% to ₹2.98 lakh crore from ₹2.61 lakh crore a year earlier.
The UAE was the largest source of non-resident holdings, followed by the US, UK and Singapore. Together, these four markets accounted for almost half of the mutual fund units held by non-residents. The RBI data also pointed to increased foreign participation in India’s asset management industry. Foreign liabilities of asset management companies rose 18.1% to $8.7 billion, supported mainly by higher direct and portfolio investments. Foreign direct investment in Indian AMCs climbed 31.1% to ₹56,201 crore in March 2026 from ₹42,874 crore a year earlier. Japan was the largest contributor, with investments of ₹36,920 crore, followed by Canada with ₹7,592 crore. Together, the two countries accounted for around 80% of foreign direct investment in Indian asset management companies.
At the same time, faster growth in overseas assets than in foreign liabilities reduced mutual funds’ net foreign liabilities to $21.3 billion in March 2026, from $22.3 billion a year earlier.
