India’s passive-fund share of equity AUM rises to 17.1% as ETFs gain momentum

Passive equity funds in India now hold 17.1% of AUM, marking a structural shift toward low-cost index investing.

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India’s passive-fund share of equity AUM rises to 17.1% as ETFs gain momentum

India’s passive-fund share of equity AUM rises to 17.1% as ETFs gain momentum
As of September 2025, passive Mutual Fund Vehicles (index funds and ETFs) in India accounted for approximately 17.1% of the total quarterly average equity assets under management, up from about 7% in FY2020, according to a report by Motilal Oswal. The growth reflects surging investor interest in low-cost index-linked products amid volatile markets and evolving regulatory support. ETFs in India logged a CAGR of 28% over the past four years, while index-fund folios alone grew by 81% from FY2021–24. 
Fund houses are now allocating more resources to passive strategies given these structural flows.
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  • mutual_funds
  • india