The Rise of Passive Investing in India: From Rs 3.09 Lakh Crore to Rs 13.73 Lakh Crore
Mumbai, 14th November 2026: We have all heard the saying “Less is more.” It reflects a simple principle, often described as the paradox of doing less: greater effort does not always lead to better results. The rising acceptance of passive investment products in India seems to reflect this thinking. Investors are increasingly exploring funds that track market indices, such as the Nifty 50 or Sensex, typically at a lower cost than actively managed funds. Passive investing also extends beyond equities, offering exposure to gold, silver and debt securities through index funds and ETFs.
The growing popularity of passive investing is evident in India’s mutual fund industry numbers. According to the AMFI–Crisil Factbook 2026, passive fund assets have grown more than fourfold, from ₹3.09 lakh crore in March 2021 to ₹13.73 lakh crore in March 2026, registering a five-year compound annual growth rate (CAGR) of 34.7%. Their share of the industry’s total assets has nearly doubled, from 9.8% to 18.6%.
Passive Funds on the Rise: Five Years of Remarkable Growth
| Financial Year-End | Passive AUM (₹ Lakh Crore) | Share of Industry AUM |
| March 2021 | 3.09 | 9.8% |
| March 2022 | 4.99 | 13.3% |
| March 2023 | 6.75 | 17.1% |
| March 2024 | 9.09 | 17.0% |
| March 2025 | 11.22 | 17.1% |
| March 2026 | 13.73 | 18.6% |
Source: AMFI–Crisil Factbook 2026.
Not all this growth represents fresh investments. Assets under management (AUM) also change with market prices. But what makes the trend more interesting is how the composition of passive investments has evolved.
The Quiet Rise of Index Funds
As of March 2021, ETFs other than gold accounted for 89.2% of passive assets. By March 2026, their share had fallen to 65.1%. Index funds moved in the opposite direction, increasing their share from 6.2% to 22.4%, with assets reaching ₹3.07 lakh crore and registering a five-year CAGR of 74.1%.
This approach has also gained ground among systematic investors. As per AMFI, index fund SIP assets reached approximately ₹46,000 crore in March 2026, growing at a five-year CAGR of 72.5%.
Passive Investing Goes Beyond Equity Indices
India’s passive fund universe has expanded beyond traditional equity indices, with investors exploring debt, gold and silver-linked products.
| Passive Fund Category | March 2026 AUM | Share |
| Other ETFs (equity, debt, silver, etc.) | ₹8.95 lakh crore | 65.1% |
| Index Funds | ₹3.07 lakh crore | 22.4% |
| Gold ETFs | ₹1.71 lakh crore | 12.5% |
| Total | ₹13.73 lakh crore | 100% |
Why Lower Costs Matter, But Risk Still Remains
Passive funds typically have lower management expenses because they follow predetermined benchmarks instead of relying on active security selection. Over longer periods, even small differences in costs can influence investment outcomes.
However, low cost does not mean low risk. An index fund declines when its benchmark falls, while sector-specific ETFs can carry concentration risks. Tracking difference, expense ratios and ETF liquidity also deserve attention.
Explore Passive Investing with Bajaj Broking
The appeal of passive investing lies in its simplicity, but choosing a suitable fund still requires research. Which benchmark matches your investment horizon? How do different schemes compare costs and performance?
Bajaj Broking’s Index Fund Directory and Mutual Fund Screener help investors explore schemes and narrow their choices. The platform offers access to over 4,000 mutual fund schemes from more than 50 AMCs.
For investors planning regular contributions, Bajaj Broking’s SIP Calculator helps estimate potential future investment values using different monthly contributions, investment periods and assumed returns. These projections are illustrative, not guaranteed. Investors can also explore SIP and lump sum investments through its mutual fund platform.
Standard Disclaimer
Investments in securities market are subject to market risks, read all related documents carefully before investing.
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