10 lakh crore and counting: Indian ETFs double in three years why they deserve a place in your portfolio

Scale, efficiency, and investor-friendly design

India’s ETF ecosystem has hit a historic inflection point: AUM exceeded ₹10 lakh crore as of October 2025, reflecting sustained flows into broad-market, sectoral, and debt ETFs. Trading volumes have expanded more than seven-fold from ₹51,000 crore in FY20 to ₹3.83 lakh crore in FY25 and are already above ₹3.2 lakh crore in H1 FY26, underscoring deepening liquidity. Together, these trends signal growing confidence in passive, rules-based products that offer transparent holdings, efficient price discovery, and instant diversification across market cycles. 

Key highlights / major takeaways

Scale milestone: ETF AUM crossed ₹10 lakh crore; industry doubled in three years.

Liquidity jump: Volumes surged >7x since FY20; FY25 hit ₹3.83 lakh crore; H1 FY26 near prior year totals.

Cost advantage: Low total expense ratios help reduce drag versus many active funds.

Transparency: Daily portfolio disclosure enables clear, rules based exposure.

Diversification: Single trade access to indices across equities, debt, and factors.

Discipline: Automatic rebalancing and index methodology curb timing biases.

Sources: The Hindu BusinessLine; Mint; Zerodha Fund House statement (as reported).