Indians Put More Money Into Gold and Silver ETFs Than Equity Last Year

In FY26, Indian investors allocated more money to gold and silver ETFs than to equity ETFs. Total ETF net inflows hit Rs 1.8 lakh crore, the highest ever recorded in a single financial year.

This blog breaks down what happened, why it happened, and what it means for you as an investor.

What Happened With ETF Inflows in FY26?

For five straight years, FY21 through FY25, total ETF net inflows stayed in the Rs 46,000–83,000 crore range. FY26 didn't just cross that range. It more than doubled the previous best of Rs 83,390 crore (FY22), landing at Rs 1.8 lakh crore.

The jump is not gradual. It is a clear break from the previous pattern.

What Drove This Surge?

1. Gold prices ran hard, and investors followed

Gold ETF net inflows in FY26 alone (Rs 68,000+ crore) exceeded the combined inflows across the entire five-year period from FY21–FY25 (Rs 30,200 crore). Gold ETF AUM grew from Rs 59,000 crore in March 2025 to over Rs 1.71 lakh crore by March 2026, a 191% jump in twelve months.

One important note: that 191% includes both new investor money coming in and the rise in gold prices itself. These are two different things.

2. Silver ETFs went from niche to mainstream

Silver ETFs were launched in India only in 2022. In FY26, they received over Rs 30,000 crore in net inflows, more than the category's entire AUM at the start of the year (Rs 15,339 crore in March 2025). In one year, investors put in more than the category was worth at the start of the year.

3. The ETF route became more tax-efficient than physical gold

This is a structural reason, not just a market trend.

For example: If you buy physical gold today and sell it after 13 months, you pay higher short-term capital gains tax. The same investment in a Gold ETF held for 13 months qualifies for the lower 12.5% LTCG rate. Same asset, different tax outcome, purely because of the holding period rule.

4. Global uncertainty pushed money toward safe-haven assets

January 2026 was the single largest month for ETF inflows ever, Rs 39,000+ crore, driven by elevated activity in gold and silver against a backdrop of global market stress. When equity markets get uncertain, investors historically move toward commodities. FY26 data reflects that pattern clearly.

Equity vs Commodity ETFs: How the Split Shifted

As recently as FY24, gold and silver ETFs were a small part of the total. In FY26, they became the majority. Average daily ETF turnover also rose from Rs 237 crore in FY21 to over Rs 4,200 crore in FY26, an 18x increase in five years. Within that, commodity ETF daily turnover (Rs 2,700 crore) exceeded equity ETF daily turnover (Rs 745 crore).

Things to Keep in Mind

• Inflows follow returns, not the other way around. Gold and silver prices rose sharply before these inflows came in. Investors were reacting to past performance.
• AUM growth ≠ only new money. A large part of the 191% Gold ETF AUM growth is price appreciation, not new investor capital.
• Commodity ETFs pay no income. No dividends, no interest. Returns are entirely dependent on price movement.
• Liquidity can thin during stress. Daily turnover crossing Rs 4,200 crore signals a maturing market, but that number can fall sharply when sentiment turns.

The Takeaway

In FY26, commodity ETFs attracted more money than equity ETFs in India, driven by gold and silver prices, tax efficiency of the ETF structure, and global uncertainty. The data points to a shift in how Indian investors are using ETFs: not just for index equity exposure, but as a route to access commodities with better liquidity and tax treatment than the physical form.

That said, a single year of high inflows into an asset class that just delivered strong returns is a pattern worth watching carefully before calling it a permanent structural shift.