In India the Mutual Fund industry started from the creation of the Unit Trust of India (UTI) in 1963 with their first scheme called the Unit Scheme'64, in the year 1964. UTI mobilised Rs 100 crore by 1978 and Rs 1,000 crore by 1985 under this scheme.

Other Indian banks launched their own Mutual Fund schemes during the period 1987 to 1990. With the 1992-93 markets crash, the Mutual Funds industry booked heavy losses and the industry's image took a massive beating. 1992 saw the setting up of the Securities and Exchange Board of India (SEBI), which is a regulatory authority, one of the functions being supervision of Mutual Funds.

NRIs can invest in all Indian Mutual Fund schemes either from their repatriable or non-repatriable accounts. In case of investment from repatriable accounts, the original investment, the capital gain earned on sale of the units and all dividend income is fully repatriable. In case of investment from non-repatriable accounts, the NRI cannot take any of his money out of the country. No specific RBI permission is required by the NRI for his investment.