Indian mutual funds significantly expanded their overseas investments in 2025-26, helping reduce their net foreign liabilities even as investments by non-resident investors in Indian mutual fund schemes continued to grow, according to the latest survey released by the Reserve Bank of India (RBI).
The survey, covering 53 mutual funds and their asset management companies (AMCs), found that the foreign liabilities of mutual funds rose 3.3 per cent year-on-year to $31.5 billion as of March 2026, largely due to an increase in the market value of units held by overseas investors.
At the same time, mutual funds sharply increased their overseas asset holdings by 23.9 per cent to $10.2 billion, driven primarily by investments in foreign equity securities. Consequently, net foreign liabilities declined to $21.3 billion from $22.3 billion a year earlier.
The survey highlighted strong participation from non-resident investors. The UAE, US, UK and Singapore emerged as the largest sources of investments in Indian mutual funds, together accounting for around half of all mutual fund units held by non-residents both at face value and market value.
The UAE remained the largest contributor, with investments at market value amounting to ₹61,299 crore, followed by the US at ₹35,502 crore and the UK at ₹28,886 crore.
Global diversification
Indian mutual funds also stepped up their global diversification efforts. Overseas equity investments climbed 37.5 per cent to ₹93,602 crore. The US accounted for nearly two-thirds of these holdings, followed by Luxembourg and Ireland, highlighting a preference for developed global markets.
On the AMC side, foreign liabilities increased 18.1 per cent to $8.7 billion, reflecting higher inward direct and portfolio investments. Foreign direct investment in AMCs rose notably, with Japan and Canada together accounting for about 80 per cent of total FDI in the sector. Japan remained the dominant investor, with holdings of ₹36,920 crore at the end of March.
Published on August 31, 2026
