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Mumbai, July 6, 2025 — The Indian mutual fund industry is poised for unprecedented growth over the next five years, with assets under management (AUM) projected to cross ₹130 lakh crore by FY2030, according to Ganesh Mohan, CEO of Bajaj Finserv Asset Management Company (AMC). This ambitious outlook reflects India’s accelerating economic momentum, evolving financial habits, and a conducive regulatory environment that continues to deepen the reach of mutual funds across the country.
Mohan, speaking at an industry event, emphasized that India’s mutual fund industry is mirroring the trajectory seen in China a few years ago. In 2017, China’s mutual fund AUM was approximately 13.7% of its GDP, which surged to 23.1% by 2022. By comparison, India’s mutual fund AUM was 12.4% of GDP in 2017, increasing to 14.5% in 2022, and reached 19% by the end of FY24. These statistics indicate not only growing investor participation but also rising confidence in mutual fund investments as a wealth-building tool.
Key Drivers of Growth
Nimesh Chandan, Chief Investment Officer at Bajaj Finserv AMC, outlined several factors expected to propel the industry’s growth:
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Robust Economic Expansion: India is projected to be the fastest-growing major economy in the world for the next two years. According to IMF’s April 2025 estimates, India’s GDP is forecasted to grow by 6.5% in 2024, 6.2% in 2025, and 6.3% in 2026. Such growth will naturally boost disposable incomes, savings, and investments.
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Fiscal and Monetary Policy Adjustments: Proactive fiscal policies and a balanced monetary stance by the Reserve Bank of India are expected to create an investment-friendly environment.
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8th Pay Commission Implementation: The anticipated implementation of the 8th Pay Commission is expected to enhance the income levels of millions of government employees, potentially channeling more money into mutual funds.
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Rising Financial Literacy and Digital Penetration: Financial awareness, coupled with the rise of digital investment platforms, has made it easier for retail investors to access mutual funds, even in semi-urban and rural areas.
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Shift Toward Long-Term Wealth Creation: There is a notable behavioral shift among Indian investors—away from traditional savings instruments and toward equity-linked instruments and Systematic Investment Plans (SIPs). This change is fostering a long-term investment culture.
India’s Position in a Multipolar World
The fund house also pointed to the evolving geopolitical and economic landscape. According to Bajaj Finserv AMC, the world is now “multipolar” with heightened government interventions and a move towards derisking rather than decoupling from major economies like the US and China.
“Countries are realigning trade agreements to reduce dependency. No one country wants the US as the sole consumer or China as the only supplier,” said Mohan. This shift favors countries like India, which are seen as neutral, stable, and emerging as trusted partners in global trade.
India’s macroeconomic stability, young workforce, and large consumer base make it an attractive destination for foreign institutional investors (FIIs) and global asset managers. This is likely to result in increased flows into Indian mutual funds, particularly those focused on infrastructure, consumption, and manufacturing sectors.
Comparative Global Growth Outlook
Here’s a quick look at the GDP growth forecasts of major economies for 2024–2026 (as per IMF, April 2025):
| Country | 2024 | 2025 | 2026 |
|---|---|---|---|
| India | 6.5% | 6.2% | 6.3% |
| Vietnam | 7.1% | 5.2% | 4.0% |
| China | 5.0% | 4.0% | 4.0% |
| Brazil | 3.4% | 2.0% | 2.0% |
| US | 2.8% | 1.8% | 1.7% |
India clearly stands out among global peers, providing an advantageous backdrop for the mutual fund industry.
What This Means for Investors
The projected AUM growth from ₹58 lakh crore (as of FY24) to ₹130 lakh crore by FY30 reflects a compound annual growth rate (CAGR) of over 14%. This translates into massive opportunities for investors, distributors, fintech platforms, and asset managers.
Moreover, the consistent rise in SIP inflows, now averaging over ₹20,000 crore per month, indicates that Indian households are increasingly turning to disciplined, long-term investing.
With SEBI’s ongoing efforts to regulate and strengthen transparency in mutual funds, and increasing participation from Tier-II and Tier-III cities, India’s mutual fund story is only getting started.
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