RBI Survey Shows Indian Mutual Funds' Overseas Assets Rise 24% as Net Foreign Liabilities Decline

Indian mutual funds significantly expanded their overseas investments during the 2025-26 period, contributing to a reduction in their net foreign liabilities even as participation from non-resident investors continued to grow. These findings are part of the latest survey released by the Reserve Bank of India (RBI).

The central bank survey covered 53 mutual funds and their respective asset management companies (AMCs). According to the data, the foreign liabilities of these mutual funds rose by 3.3 per cent year-on-year to reach $31.5 billion as of March 2026. This increase was largely attributed to a higher market value of units held by overseas investors.

Simultaneously, mutual funds sharply increased their holdings of overseas assets by 23.9 per cent to $10.2 billion. This expansion was driven primarily by direct investments in foreign equity securities. Consequently, net foreign liabilities decreased to $21.3 billion, down from $22.3 billion recorded a year earlier.

The survey also detailed strong geographic participation from non-resident investors. The United Arab Emirates, the United States, the United Kingdom, and Singapore emerged as the largest sources of investments in Indian mutual funds. Together, these four countries accounted for approximately half of all mutual fund units held by non-residents, evaluated at both face value and market value.

The UAE remained the single largest contributor, with investments valued at ₹61,299 crore at market price. The United States followed with ₹35,502 crore, and the United Kingdom recorded ₹28,886 crore.

In addition, Indian mutual funds stepped up their global diversification initiatives. Overseas equity investments climbed by 37.5 per cent to reach ₹93,602 crore. The United States accounted for nearly two-thirds of these global holdings, followed by Luxembourg and Ireland, pointing to a distinct preference for developed international markets.

On the asset management company side, foreign liabilities increased by 18.1 per cent to reach $8.7 billion. This rise reflected higher inward direct and portfolio investments. Foreign direct investment (FDI) in AMCs rose notably, with Japan and Canada jointly accounting for roughly 80 per cent of total FDI in the sector. Japan maintained its position as the dominant investor, with holdings valued at ₹36,920 crore at the end of March.

"The RBI survey data reflects a maturing financial ecosystem where Indian asset managers are actively diversifying their portfolios into developed global markets like the US, Luxembourg, and Ireland. At the same time, steady inward investments from regions like the UAE, US, UK, and Singapore demonstrate sustained global confidence in Indian mutual funds. This balanced cross-border capital flow highlights growing financial integration and strategic portfolio management within the industry." — Dr. Shishir Gupta, Founder & CEO, StartupLanes