Sberbank Opens First-Ever India-Focused Mutual Fund for Russian Investors, Linking Rupee Surpluses to Nifty50 Growth

Russia’s state-owned lender Sberbank has launched the country’s first India-centric mutual fund, offering everyday Russians direct exposure to the Nifty50, India’s benchmark equity index. The product, called “First-India”, marks a significant expansion of financial ties between Moscow and New Delhi and creates a new mechanism for putting Russia’s surplus Indian rupees to productive use.

The fund was unveiled in Mumbai during Sberbank CEO Herman Gref’s visit, coinciding with high-level bilateral meetings between Russian and Indian officials. The bank described the initiative as a milestone that allows Russian retail investors to track the performance of India’s top 50 listed companies through a regulated, ruble-denominated investment product.

Gref said the timing aligns with India’s strong macroeconomic performance, noting the country’s status as one of the fastest-growing major economies. India’s large-cap equity market—powered by financials, technology, consumer goods, and energy companies—continues to attract global interest, with the Nifty50 serving as the primary gateway for foreign investors.

A New Route for Russian Investors

The First-India mutual fund, developed jointly with JSC First Asset Management, gives Russian savers a straightforward investment path that mirrors the Nifty50 index. The fund allows Russian investors to buy units domestically in rubles while gaining exposure to India’s blue-chip stocks—something previously unavailable at the retail level due to capital restrictions and market barriers.

By linking directly to a widely tracked index, the product minimizes stock-specific risk and simplifies access to one of the world’s most dynamic equity markets.

Recycling Rupee Surpluses

Beyond investor convenience, the new fund also addresses a growing financial imbalance. Since 2022, Russia has accumulated large volumes of Indian rupees due to India’s significant purchases of discounted Russian crude and the shift toward non-dollar settlement. These rupees are difficult to repatriate because of currency restrictions.

Sberbank—responsible for the largest share of Indo-Russian settlement flows—has been seeking ways to deploy these funds efficiently. The First-India fund offers a solution by channeling rupee-linked investments into Indian financial markets rather than letting the currency sit idle.

The bank is also investing a portion of these rupees into Indian government securities, reinforcing its long-term exposure to the local economy.

Expanding Sberbank’s Footprint in India

The launch of the new fund is part of a broader push by Sberbank to strengthen its presence in India. The bank is examining plans to open up to 10 new branches, build a dedicated data centre, and expand into new sectors, including healthcare and education services.

The initiative also reflects a shift in Russia’s global financial alignment. With Western markets largely inaccessible due to sanctions, Russian financial institutions are increasingly turning toward Asia and the Global South.

Significance for India

For India, the initiative carries several advantages:

• It brings long-term Russian capital into Indian equity and bond markets.

• It supports rupee internationalisation, aligning with New Delhi’s broader financial diplomacy goals.

• It reinforces the stability of the India–Russia economic partnership, even during global geopolitical turbulence.

A regulated, foreign-domiciled product tied to the Nifty50 also enhances India’s image as a reliable investment destination for emerging-market partners.

A New Chapter in Indo-Russian Financial Relations

The First-India fund gives Russian households a simple way to participate in India’s economic expansion while providing Moscow with a practical channel to utilize its rupee holdings. For both countries, the launch marks an evolution from traditional energy and defence cooperation toward deeper financial integration—one that could shape future cross-border investment flows.

Sberbank’s entry into India-focused retail investing underscores a broader trend: as Russia looks eastward for growth and stability, India’s capital markets are becoming an increasingly important destination.