India’s ETF industry has reached a significant milestone, demonstrating robust growth and increasing investor confidence. As of October 2025, Assets Under Management (AUM) in Exchange Traded Funds (ETFs) have surpassed a remarkable Rs 10 lakh crore, according to a recent announcement by Zerodha Fund House. This achievement underscores a powerful shift in the Indian investment landscape towards accessible, low-cost, and transparent investment options.
The Explosive Growth of Indian ETFs
The past few years have witnessed an unprecedented surge in the popularity of ETFs in India. The industry has doubled its AUM in just three years, a testament to the growing understanding of their benefits among investors. This isn’t just about increased assets; it’s about a fundamental change in how Indians are choosing to invest.
Trading activity has mirrored this AUM growth. ETF trading volumes have skyrocketed more than sevenfold, jumping from Rs 51,000 crore in the financial year 2019-20 to a substantial Rs 3.83 lakh crore in FY 2024-25. Zerodha Fund House attributes this to improving market depth and wider participation from various investor segments across Indian stock exchanges.
Momentum Continues into 2026
The positive trend shows no signs of slowing down. In the first six months of the financial year 2025-26, ETF trading volumes have already exceeded Rs 3.2 lakh crore – almost matching the entire volume recorded in the previous year. This sustained momentum suggests that ETFs are becoming increasingly integrated into the core investment strategies of both retail and institutional investors.
This heightened liquidity is proving beneficial for all participants. Zerodha Fund House highlights that tighter spreads, improved price discovery, and smoother trade execution are all direct results of the increased trading volume, making the investment experience more efficient and cost-effective.
The Rise of the Retail Investor in the ETF Space
A key driver of this growth has been the dramatic increase in retail participation. The number of ETF investor accounts has exploded, growing more than eightfold from approximately 41 lakh folios in November 2020 to over three crore folios by November 2025. This surge is fueled by increased financial literacy and the ease of access provided by digital investment platforms.
Vaibhav Jalan, CBO of Zerodha Fund House, explains the appeal to new investors: “For new investors, ETFs act as a versatile tool to take exposure to different asset classes, themes, and segments since they are simple, cost-effective and transparent in their structure.” This simplicity and accessibility are breaking down barriers to entry for a wider range of individuals looking to participate in the financial markets.
Equity ETFs Lead, But Diversification is Growing
While equity ETFs continue to dominate the market, accounting for 25 lakh of the new folios added in the last 12 months, investor preferences are becoming increasingly diversified. There’s a noticeable shift towards allocating funds to other asset classes, particularly precious metals.
Gold and Silver ETFs Gain Traction
Gold and silver ETFs are experiencing significant growth in popularity. Together, they now represent nearly 15% of the total ETF AUM as of November 2025. Over the past year, gold ETF AUM has doubled, surpassing Rs 1 lakh crore, while silver ETF AUM has quadrupled to over Rs 49,000 crore. This indicates a growing desire among investors to diversify their portfolios and hedge against economic uncertainty. This diversification trend is a healthy sign for the maturity of the mutual fund market in India.
Zerodha Fund House: A Pioneer in the ETF Landscape
Vishal Jain, CEO of Zerodha Fund House, expressed his satisfaction with the industry’s progress. “Crossing the ₹10 Lakh Crore AUM mark is a landmark moment for the Indian ETF space. Having launched India’s first ETFs across equity, gold, liquid, and government divestment categories, it is satisfying to see the product mature and gain such widespread adoption.”
Zerodha Fund House, a joint venture between Zerodha Broking Ltd. and CASE Platforms Private Limited (formerly Smallcase Technologies Private Limited), has played a pivotal role in shaping the Indian ETF market. Their early adoption and innovation in offering diverse ETF options have contributed significantly to the industry’s overall growth.
Looking Ahead: The Future of ETFs in India
The Indian ETF market is poised for continued expansion. The increasing AUM, rising trading volumes, and growing retail participation all point towards a bright future. As investor awareness continues to grow and digital platforms become even more sophisticated, we can expect to see further innovation in ETF offerings and even greater adoption across the country.
The success of ETFs in India demonstrates a clear demand for accessible, transparent, and cost-effective investment solutions. This trend is likely to continue, solidifying the position of ETFs as a cornerstone of the Indian investment landscape.
To learn more about ETFs and how they can fit into your investment strategy, explore resources offered by Zerodha Fund House and other leading financial institutions. Consider consulting with a financial advisor to determine the best investment options for your individual needs and risk tolerance.
