Mutual fund’s overseas assets jump 24% reducing net foreign liabilities: RBI

During 2025‑26, Indian mutual funds markedly increased their foreign investments, which helped lower their net foreign liabilities even as inflows from non‑resident investors into Indian fund schemes kept rising, according to the newest Reserve Bank of India (RBI) survey.

Key Takeaways

• Indian mutual funds’ overseas assets rose 23.9% to $10.2 billion in FY26, per an RBI survey of 53 funds and AMCs.
• Foreign liabilities grew 3.3% to $31.5 billion, but net foreign liabilities fell to $21.3 billion from $22.3 billion a year earlier.
• The UAE, US, UK and Singapore were the top sources of non-resident investment, together holding roughly half of foreign-held fund units.
• The UAE led with Rs 61,299 crore in market-value investments, followed by the US at Rs 35,502 crore and the UK at Rs 28,886 crore.

The survey, encompassing 53 mutual funds and their asset management companies (AMCs), reported that mutual‑fund foreign liabilities grew 3.3 % year‑on‑year to reach $31.5 billion by March 2026, driven mainly by the higher market value of units owned by overseas investors.

Simultaneously, mutual funds expanded their overseas assets by 23.9 % to $10.2 billion, primarily through purchases of foreign equities. As a result, net foreign liabilities fell to $21.3 billion from $22.3 billion a year earlier.

The survey also highlighted robust participation from non‑resident investors. The UAE, United States, United Kingdom, and Singapore were the top sources of investment in Indian mutual funds, together representing roughly half of all fund units held by foreigners, both at face value and market value.

The UAE led the way, with market‑value investments of ₹61,299 crore, followed by the US at ₹35,502 crore and the UK at ₹28,886 crore.

Global diversification

Indian mutual funds also intensified their global diversification strategies. Overseas equity holdings rose 37.5 % to ₹93,602 crore, with the United States accounting for about two‑thirds of that total, followed by Luxembourg and Ireland, indicating a tilt toward mature markets.

On the AMC front, foreign liabilities climbed 18.1 % to $8.7 billion, reflecting greater inward direct and portfolio investments. Foreign direct investment in AMCs surged, with Japan and Canada together supplying roughly 80 % of total FDI in the sector. Japan remained the leading investor, holding ₹36,920 crore at the end of March.

Published on August 31, 2026