In comparison, infusion of $1.7 billion was seen in the January-July period of 2016.
The offshore India fund — not domiciled in India — receives flows from overseas investors and in turn invests the money into the Indian markets.
According to the report, India-focused offshore equity funds
registered net inflow of $4.35 billion, while India- focused offshore ETFs
witnessed net inflows
of $982 million, taking the total to $5.33 billion.
Flows into equity funds are generally considered to be long-term in nature, whereas flows into ETFs
indicate predominantly short-term money.
The higher inflows into equity funds compared with ETFs
suggest that foreign investors have confidence in the country's markets and viewing it as a long-term investment destination.
Himanshu Srivastava, senior analyst manager research at Morningstar said that FPIs are cautious about investing in Indian equities at this juncture given higher valuations and tepid earning growth in many sectors.
"Also, Indian equities have seen good growth in the recent times. This, coupled with rupee appreciation against the greenback, has generated a good profit booking opportunity for foreign investors," he added.