India's exchange-traded fund (ETF) market experienced a record-breaking year in FY26, with total net inflows exceeding ₹1.81 lakh crore. A standout trend within this surge was the remarkable performance of gold ETFs, which alone attracted net inflows of ₹68,868 crore – more than double the cumulative inflows seen over the previous five financial years combined.
According to a study by Zerodha Fund House, based on AMFI data, gold ETF assets under management (AUM) witnessed a staggering 191% increase, rising from approximately ₹59,000 crore in March 2025 to over ₹1.71 lakh crore by March 2026. This exponential growth underscores robust investor demand for gold as a safe-haven asset amidst prevailing global uncertainty and market volatility.
Commodity ETFs Lead the Way
For the first time, commodity ETFs, comprising both gold and silver, collectively attracted more inflows than equity ETFs. Together, gold and silver ETFs garnered ₹99,280 crore, accounting for nearly 55% of total ETF inflows in FY26. In contrast, equity ETFs secured ₹77,780 crore, or about 43% of the total. This represents a significant deviation from previous years, where India's ETF market was predominantly equity-driven.
The most active month was January 2026, which saw over ₹39,000 crore in net inflows, largely fueled by heightened interest in precious metal ETFs due to ongoing geopolitical tensions and market fluctuations.
Why the Surge in Gold ETF Inflows?
Several factors have contributed to the unprecedented surge in gold ETF inflows and AUM:
- Global Uncertainty: Investors are increasingly seeking diversification and safe-haven assets amidst inflation concerns and geopolitical instability.
- Gold Price Rally: Gold has emerged as one of the best-performing asset classes globally, making ETFs an attractive avenue for exposure.
- Ease of Access: Gold ETFs offer a convenient and efficient way to invest in gold without the logistical challenges of physical gold, such as storage and purity concerns.
- Tax Efficiency: Gold ETFs qualify for long-term capital gains (LTCG) tax at 12.5% after 12 months, a more favorable treatment compared to the 24-month holding period required for physical gold.
Deepening Liquidity and Participation
The Indian ETF ecosystem is also experiencing a marked improvement in liquidity. Average daily ETF turnover has surged from ₹237 crore in FY21 to over ₹4,200 crore between April 2025 and February 2026, an eighteen-fold increase. Commodity ETFs were a major driver of this growth, with an average daily turnover of around ₹2,700 crore, surpassing equity ETF turnover during the same period. This indicates both increased investor participation and intensified trading activity in gold and silver ETFs.
“What stands out in FY26 is not just the size of the inflows, but where they came from. For years, ETFs in India were largely an equity story. The fact that Gold and Silver ETFs together attracted more inflows than equity ETFs suggests that investors are beginning to use the ETF structure to build more diversified portfolios,” said Vishal Jain, CEO of Zerodha Fund House.
Outlook: A Structural Shift in Investment
The robust momentum in gold and silver ETFs in FY26 signals a growing inclination among Indian investors towards diversified portfolios. This trend, driven by macroeconomic factors like inflation concerns, geopolitical risks, and rising gold prices, is viewed by market participants as a structural evolution in India’s investment landscape. With enhanced liquidity, tax benefits, and ease of access, ETFs are increasingly becoming a preferred investment vehicle, ensuring commodity ETFs remain a focal point for the foreseeable future.