Four asset management companies (AMCs) have restricted subscription in their respective gold ETFs and FoFs for an amount exceeding Rs 25 crores starting from June 5. The four AMCs include – HDFC Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mutual Fund and Nippon India Mutual Fund.

The fund houses are restricting large inflows into gold ETFs and FoFs that invest in such schemes, in line with the government’s recent efforts to discourage excessive gold purchases, and AMCs cited broader economic and market conditions as the main reason for such a move.

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“In light of the broader economic and market conditions, it has been decided to temporarily restrict lumpsum subscriptions in Gold ETF and Gold ETF Fund of Fund until further notice,” the fund houses said.

In a speech delivered in Hyderabad’s Secunderabad on May 10, Prime Minister Narendra Modi urged Indians to avoid buying gold for the next year, an appeal that immediately grabbed attention in a country where gold is far more than a financial asset. For Indian households, the precious metal represents tradition, security, weddings, savings and generational wealth, making the Prime Minister’s remarks both unusual and significant.


The Centre on May 12 increased customs duty on imports of gold, silver and other precious metals. Under the new structure, the effective import duty on gold and silver has been raised to 15% from 6% earlier. The government imposed a 10% basic customs duty along with a 5% Agriculture Infrastructure and Development Cess (AIDC), sharply increasing the landed cost of imported bullion almost overnight.
Gold remains one of India’s largest import commodities. In FY26, the country imported gold worth $72 billion, marking a 24% increase over the previous fiscal year.According to these fund houses, the direct subscriptions of Rs 25 crore and above by large investors will not be accepted from the effective date. However, existing SIPs and smaller investments in these funds remain unaffected.

HDFC Mutual Fund has restricted lumpsum investments in its gold ETF and fund of funds – HDFC Gold ETF and HDFC Gold ETF Fund of Fund with effect from June 8 and June 5, respectively.

ICICI Prudential Mutual Fund has restricted subscription in its gold ETF – ICICI Prudential Gold ETF with effect from the close of market hours on June 5. Kotak Mutual Fund has restricted subscription in the Kotak Gold ETF Scheme with effect from June 8 on lumpsum subscriptions by large investors.

Nippon India Mutual Fund has announced limits on subscription in Nippon India ETF Gold BeES and Nippon India Gold Savings Fund with effect from June 8 till further notice. The fund house, through a notice cum addendum, said that in view of prevailing market conditions, Nippon India Mutual Fund has decided to limit the subscriptions in Nippon India ETF Gold BeES and Nippon India Gold Savings Fund.

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“Nippon India ETF Gold BeES, currently, the facility of creating units in creation unit size for direct subscription (purchase) with the AMC is available to the Authorised Participants / Market Makers and Large Investors, with the execution value for large investors required to be greater than Rs 25 crores. It has been decided to discontinue direct fresh subscription with the AMC for Large Investors from the effective date. However, this restriction shall not apply to Authorised Participants/ Market Makers,” Nippon India Mutual Fund said.

Post HDFC Mutual Fund announced restrictions on lumpsum subscriptions in its gold ETF and FoF, Feroze Azeez, Joint CEO, Anand Rathi Wealth, said that HDFC Mutual Fund’s decision to temporarily restrict lump-sum inflows into its Gold ETF and Gold ETF Fund of Fund is a responsible step.

Azeez further said that we hope other AMCs also follow suit because excessive financialisation of gold at elevated prices can add to import demand, put pressure on the current account deficit and eventually contribute to rupee depreciation.

In the international market, spot gold fell 0.2% to $4,321.49 per ounce as of 0124 GMT, after tumbling about 3% on Friday to its lowest level since March 24.

Azeez further said, “Our stance on gold has been very clear. Indians should not only stop buying gold at these levels but also look at selling a small portion of their idle gold holdings. This is not just an investment decision. It is a small sacrifice one can make for the nation, symbolising financial patriotism.”

The caution comes after a spectacular run in gold prices over the past year. The HDFC Gold ETF Fund of Fund delivered around 57% returns in the last year, while its assets under management (AUM) surged to nearly Rs 11,464 crore in April 2026 from about Rs 3,870 crore a year earlier, reflecting a near threefold jump in investor interest.

The inflows in gold ETFs have hit an all-time high of Rs 24,039 crore in January 2026, registering a 106% increase over December 2025 from an inflow of Rs 11,646 crore in December 2025.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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