India-focused offshore funds and exchange-traded funds (ETFs) have pumped in over $500 million in May, taking the total to $3.6 billion so far this year.
An offshore India fund is one that is not domiciled in the country but invests primarily in Indian markets.
Net investments made by India-focused offshore funds stood at $360 million last month, while ETFs poured in $140 million, according to a report by mutual fund tracker Morningstar.
The total net inflow in April was $1.10 billion.
Positively, more money continue to flow into India focused funds compared to India focused ETFs which signify long-term money. Flows into ETF are considered as short-term in nature.Himanshu Srivastava, Senior Analyst Manager Research at Morningstar India
In comparison, net inflow by Foreign Portfolio Investors (FPIs) in equities stood at $1.4 billion last month.
"The most prominent reason for the inflow is expectation from the government that it would speed up development and economic reforms in their last two years in office before going for elections in 2019. The government finalising Goods and Services Tax rates and expectation that it will be rolled out on time in addition to forecasts of normal monsoon also led to positive sentiments," he added.
So far in 2017, India focused offshore funds have pumped in $2.7 billion compared to $895 million by India focused offshore ETFs, the report noted.