Interestingly, the AUM share of ETFs nearly doubled over the past five years. ETFs’ assets at ₹8.38 lakh crore accounted for 13 per cent of the total ₹65.74 lakh crore of the industry in March. In comparison, ETFs accounted for 7 per cent of the industry AUM in March 2020, according to a study by Zerodha Fund House.

An ETF is a mutual fund scheme that trades like a stock on a stock exchange. The Indian ETF market, although still relatively young, has demonstrated growth across multiple dimensions, including AUM, investor base, product diversity, and trading volumes.

As investors seek lower-cost, transparent, and liquid investment options, ETFs may be positioned to become a core component of Indian portfolios. Many new-age mutual funds are focusing on passive funds, including ETFs, to attract investors with simple products.

The retail asset in ETF has more than tripled to Rs 17,800 crore in March, up from ₹5,335 crore in March 2020, as retail investor folios increased tenfold to 2.63 crore from 23.22 lakh in March 2020.

The trading volume of ETFs in India has increased seven times to ₹3.83 lakh crore in FY25, compared to ₹51,101 crore in FY20. In fact, it has also more than doubled in the last one year. The higher liquidity allows for smoother and more efficient trading, though it can vary across different ETF asset classes.

Equity-oriented ETFs continue to dominate, accounting for about 80 per cent. The consistent share for Equity ETF AUM indicates a preference for equity investments through the ETF route, highlighting the effectiveness of these instruments for gaining exposure to the stock market.

Vishal Jain, CEO of Zerodha Fund House, said this study highlights a new era for Indian ETFs, marked by surging retail participation and expanding product diversity, reflected in higher resultant volumes.

Globally, ETFs have a large market with almost 14,000 ETFs listed and a total ETF size of over $15 trillion. Globally, a record $1.9 trillion was invested in ETFs in 2024.

Published on July 2, 2025