Best India ETFs on the ASX

An India ETF provides ASX-listed exposure to Indian equities, capturing the growth of one of the world's fastest-growing major economies. The two key options are IIND (BetaShares India Quality ETF, tracking an MSCI India Quality index focused on high-ROE companies) and NDIA (VanEck India Growth Leaders ETF, targeting high-growth companies with momentum characteristics). Holdings typically include IT giants Infosys and TCS, financial leaders HDFC Bank and Reliance Industries, benefiting from India's demographic tailwinds, Modi government reforms, and a rapidly expanding middle class.

The critical distinction is index philosophy: IIND uses a quality factor screen (high ROE, stable earnings, low leverage) producing a more defensive portfolio, while NDIA targets growth and momentum, delivering higher upside but greater drawdown risk. Compare fees - IIND charges 0.80% and NDIA 0.69% - both expensive versus broad market ETFs due to emerging market access costs. Neither is AUD-hedged, so investors carry full INR/AUD currency exposure. Check withholding tax treatment, as India imposes withholding tax on dividends that may not be fully reclaimable, reducing effective yield.

India levies a 20% withholding tax on dividends paid to foreign investors, which reduces gross yield before it reaches Australian unitholders. Australian investors can claim a Foreign Income Tax Offset (FITO) on their ATO tax return to avoid double taxation, but the offset is limited to the Australian tax payable on that foreign income - if your marginal rate is lower than 20%, the excess credit is lost. SMSF trustees in pension phase paying 0% tax cannot utilise FITOs at all, making the Indian withholding tax a permanent drag on returns, which is an important consideration when comparing India ETFs against domestically-focused alternatives.

Key risks include INR/AUD currency volatility, emerging market governance concerns, regulatory unpredictability, elevated valuations relative to other emerging markets, and concentrated sector exposure to IT and financials. India's capital controls and foreign investment restrictions can also create tracking challenges for ETF issuers. India ETFs suit growth-oriented investors with a 7–10 year horizon seeking emerging market diversification beyond China, who understand that short-term volatility can be severe - Indian equities fell over 30% in AUD terms during the 2020 COVID crash before recovering strongly.