 "Go beyond Nifty: DSP's MSCI ETF offers wider, tax-efficient India exposure")
DSP Mutual Fund on Monday launched the DSP MSCI India ETF, an open-ended exchange-traded fund that seeks to replicate the performance of the MSCI India Index (TRI), giving domestic and NRI investors a new passive route to play India’s large- and mid-cap growth through one of the world’s most tracked equity benchmarks.
The New Fund Offer (NFO) opened on 10 November and will close on November 17, 2025.
The fund aims to replicate the MSCI India Index (TRI) — the same benchmark used by global allocators and foreign institutional investors (FIIs) to track India. The index covers 160 stocks, including 92 large-caps and 68 mid-caps, representing roughly 85% of India’s free-float market cap, far broader than the Nifty 50.
The MSCI India Index, part of MSCI’s Global Investable Market Indexes (GIMI) framework, represents a diversified portfolio of Indian equities across key sectors that capture the changing structure of India’s economy—from industrial-led growth in the 1990s to today’s services-driven landscape. The index currently covers a broad universe of large and mid-cap stocks, reflecting the depth and evolution of the Indian market.
Over the long term, the MSCI India Index has delivered a 14% CAGR over the past 27 years, highlighting its ability to capture India’s growth potential while maintaining resilience across market cycles.
“The MSCI India Index has long been a preferred benchmark for global investors to participate in India’s growth story. With the DSP MSCI India ETF, we aim to make this opportunity easily accessible to investors in India and abroad. This ETF allows them to gain diversified exposure to India’s large and mid-cap companies through a globally recognized, transparent, and disciplined index methodology,” said Anil Ghelani, CFA – Head – Passive Investments & Products at DSP Mutual Fund. How is the Index composition different from Nifty 50 and Nifty LargeMid250 Index?
MSCI India Index has Lower concentration in top holdings and is more diversified than Nifty 50.
Why this ETF matters now
Foreign ownership in Indian equities has fallen sharply since late-2021, with FIIs pulling out nearly ₹1.4 trillion, data shared in the DSP presentation shows. That has dragged down foreign shareholding in domestic markets, but sentiment has begun to turn.
As global funds rotate back to emerging markets and India strengthens its position in global indices, MSCI-linked flows could accelerate — making this ETF well-timed for investors positioning ahead of a potential FII return cycle.
What the MSCI India Index offers
- Long-term performance
- The MSCI India Index has delivered approximately 14% CAGR over 27 years, according to DSP data.
Diversification advantage
Lower top-10 concentration vs Nifty 50 (37.7% vs 53%)
Broader representation across sectors — not just mega-caps
Includes many companies FIIs favour that domestic indices underweight
Sector evolution
The index historically mirrored India's shift from industrial economy to services leadership, with financials, tech, energy, and consumer sectors dominating today.
Tax edge for NRIs and global investors
Unlike overseas India-focused ETFs, this fund benefits from India-domiciled tax treatment.
Currently, tax on dividends received and selling done by ETFs listed in India are not subject to taxes compared to few other countries where such income may be subject to tax
The DSP MSCI India ETF provides a tax-efficient route to access India’s growth story. Unlike overseas-listed ETFs, dividends received and portfolio rebalancing within the fund are not subject to immediate taxation in India. This structure enhances potential post-tax returns, especially for NRI and offshore investors seeking exposure to Indian equities through a locally domiciled vehicle.
Who should consider this fund?
Suitable for:
- Long-term equity allocators
- NRI investors seeking India exposure with tax efficiency
- Investors wanting large- & mid-cap diversification without active-fund bias
- Those looking to benefit from a potential FII inflow reversal
- Exit load: None
- Expense ratio: Up to 0.3%
- Minimum application: ₹5,000 during NFO
The ETF arrives at a time when passive investing and global index linkages are rising in India. MSCI-based exposure is already a key FII route — $81 billion passive AUM ties into MSCI India, per DSP data.
"The MSCI India Index offers a robust representation of India’s evolving economy, with a balance across financials, technology, energy, and consumer sectors. Over time, it has demonstrated consistent performance with relatively stable drawdowns compared to broader benchmarks. Through the DSP MSCI India ETF, investors can now capture this growth potential efficiently and with the added benefit of local tax advantages,” said Gurjeet Kalra, Business Head – Passive Investments, DSP Mutual Fund.