NRIs rushing to invest in Indian mutual funds

The number of non-resident Indians queuing up to invest in Indian mutual funds has gone up in the last two months, say several mutual fund advisors. “The number of NRI clients in our client base is on a rise recently. This is mostly because of the strong Indian economy and the great show by Indian stock markets and the mutual fund industry,” says Neeraj Chauhan, CEO, The Financial Mall.

Mutual fund advisors believe that apart from the India Story, gloom in the real estate sector is also prodding Indians abroad to explore lucrative avenues like Indian mutual funds. “After 2011, NRI investors quit the real estate sector as it was not paying off. Now, the gears have shifted to mutual funds,” says Puneet Oberoi, a Certified Financial Planner (CFP), based in Delhi.

Oberoi also believe that though bullish on Indian markets, these investors are reluctant to bet on stocks directly. That is the main reason why they are keen to explore the mutual fund route. “These investors are skeptical about investing in stocks. They have either burnt their fingers in market crashes or have a fair idea of the risk. So, these NRI investors are sticking to mutual funds for now.”


Indian mutual fund industry has been growing at a rapid pace lately. The industry manages a record Rs 18 trillion, according to AMFI data. After the currency withdrawal of the central bank and lower interest rates on bank deposits are forcing investors to consider mutual funds.

Politics is also playing a supporting role. The Modi government being in majority at the centre is giving a positive signal for Indian businesses and economy. “A majority government paves way for smoother passage of bills and developmental projects. This creates a positive sentiment in the global markets and right now, this is working in India’s favour,” says Kartik Swaminathan, Certified Financial Planner.

Global politics is also driving NRI investors to India. Apart from stronger economy and politics, the uncertainty in the USA is also working in India’s favour. “NRIs from USA and UAE are now in a constant fear of having to leave the respective countries anytime. This is also a factor that they are looking towards India for investments,” says Neeraj Chauhan.

Mutual fund advisors say these NRIs need a bit of handholding when it comes to choosing the right mutual fund scheme. “They typically speak about equity mutual funds. One has to talk to them in detail before picking a suitable investment option for them,” says Neeraj Chauhan.