'New Sberbank NIFTY50 fund turns rupee surplus into long-term India investment', says expert

Sberbank, Russia’s largest bank, along with JSC First Asset Management, has launched an India-focused mutual fund that offers Russian retail investors direct exposure to the Indian equity market through the NIFTY50 index. Named First–India, the fund tracks the performance of India’s benchmark equity index, providing a regulated route for Russian investors to participate in India’s growth story.

The First–India mutual fund will mirror the NIFTY50 index, which represents India’s 50 largest companies by market capitalisation. The index is the flagship benchmark of the National Stock Exchange (NSE) and comprises highly liquid large-cap stocks across 15 key sectors of the Indian economy. Since its launch in 1996, the NIFTY50 has emerged as one of the most widely tracked equity indices globally and is set to complete 30 years on April 22, 2026.

India already has more than 45 passive mutual funds that track the NIFTY50, while another 22 passive funds outside the country benchmark against the index, underlining its global relevance. The launch of a Russia-based fund tracking the NIFTY50 further strengthens the index’s international footprint and opens a new channel for foreign retail participation in Indian equities.

Shweta Rajani, Head – Mutual Funds at Anand Rathi Wealth Limited, described the fund as a significant milestone in India–Russia financial cooperation. She noted that bilateral trade between the two countries reached $68.7 billion in FY25, with India importing far more from Russia than it exported. As a result, Russia now holds close to $59 billion worth of Indian rupees that cannot be freely converted into dollars due to sanctions.

“This fund offers a practical and commercially sound solution. It allows these rupees to be invested in India by linking them to the NIFTY50 index,” Rajani said. She added that Russian investors gain a regulated avenue to participate in India’s long-term growth, while India benefits from stable capital inflows that are tied to trade rather than short-term speculative movements.

Rajani said the importance of the fund extends beyond the investment itself. By creating an investment pathway using local currencies, it demonstrates India’s ability to design financial structures that function even when traditional settlement routes are constrained. She noted that such models could be studied by other emerging markets seeking alternatives to dollar-centric systems and more resilient cross-border payment mechanisms.

She added that the fund’s closed-end structure and regulatory approvals are designed to ensure disciplined participation in Indian equities. Key considerations going forward include managing the rupee–ruble exchange dynamic, monitoring the pace of inflows and ensuring smooth coordination between Indian and Russian regulators as the framework evolves.

Market expert Gurmeet Chadha, Managing Partner and CIO at Complete Circle Consultants, called the launch a major development, highlighting Russia’s significant rupee surplus. He said the move could serve as a template for the NSE to collaborate with other BRICS nations and emerging markets across Africa, South America, Asia and beyond.

According to Chadha, such tie-ups could help Indian markets tap foreign retail investors more effectively and unlock long-term global capital flows, strengthening India’s position as a key destination for international investment.