Indian Exchange Traded Funds (ETFs) have recorded net inflows exceeding Rs 1.81 lakh crore in the financial year 2025-2026, marking the highest level ever achieved in any financial year, as reported by Zerodha Fund House. This figure represents a significant increase, more than double the previous record of Rs 83,390 crore noted in the financial year 2021-2022, according to data from the Association of Mutual Funds in India. The years between FY21 and FY25 saw annual ETF inflows consistently remain in the range of Rs 46,000 crore to Rs 83,000 crore, indicating a marked shift in investment behaviour.

Dominance of Commodity ETFs

Commodity ETFs, particularly those focused on gold and silver, have led the charge in terms of inflows during FY26. Gold ETFs attracted Rs 68,868 crore, while silver ETFs garnered Rs 30,412 crore. Together, these commodities accounted for Rs 99,280 crore, which is approximately 55 per cent of the total ETF inflows for the year. In contrast, equity ETFs secured Rs 77,780 crore, constituting around 43 per cent, with debt ETFs contributing Rs 4,066 crore to the total. The market dynamics show a significant shift, with commodity ETFs previously representing less than 17 per cent of overall ETF inflows as recently as FY24.

Zerodha Mutual Fund’s CEO, Vishal Jain, highlighted the importance of the inflow size and the new sources of these investments, indicating a trend towards diversification among Indian investors. Traditionally, the ETF market in India has been dominated by equities, but the substantial inflow into gold and silver ETFs suggests a growing recognition of the role these vehicles can play in creating more balanced portfolios.

Gold ETFs have notably experienced remarkable growth, with net inflows in FY26 surpassing the combined total from the previous five years, which was approximately Rs 30,200 crore. The assets under management for gold ETFs skyrocketed from around Rs 59,000 crore in March 2025 to more than Rs 1.71 lakh crore by March 2026. This increase is attributed to both rising gold prices and heightened investor interest, further bolstered by advantageous tax treatment compared to physical gold.

Increasing Trading Activity

January 2026 was particularly noteworthy, as it emerged as the strongest month for ETF inflows, generating over Rs 39,000 crore, primarily from gold and silver ETFs amidst global market volatility. Total trading activity within the ETF sector also saw considerable growth, with average daily turnover rising dramatically from Rs 237 crore in FY21 to over Rs 4,200 crore between April 2025 and February 2026. This surge was largely driven by commodity ETFs, which maintained an average daily turnover of approximately Rs 2,700 crore, compared to Rs 745 crore for equity ETFs during the same period.

The increased turnover reflects a broader engagement with ETFs, as more investors seek to capitalise on market conditions. Commodity ETFs have captured a substantial portion of trading activity, underscoring the growing significance of these investment options in the Indian financial landscape. The changes observed over the past financial year point to a transformation in investor preferences, with commodities gaining prominence alongside traditional equity offerings.

As the ETF market continues to evolve, the data suggests a potential for further diversification in investment strategies, driven by both macroeconomic factors and shifts in investor sentiment. The overall rise in inflows and trading activity signals a vibrant future for ETFs in India, setting a precedent for sustained growth and participation across various asset classes.

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