Where India's next wave of investors could come from

India's next wealth opportunity lies in helping millions of savers become long-term investors through trusted guidance.

Co-authored by:

Vishal Madia, Partner , Wealth and Asset Management, EY India.

In brief

• India's next financial opportunity is wealth inclusion at scale, with over 100 million additional investors potentially entering long-term investing over the next decade
• The next wave of growth may be driven by Tier-2 and Tier-3 households, women investors, young professionals and emerging affluent segments.
• DPI, AI and scalable guidance can help bridge the advice gap and accelerate wealth creation for Indian households.

Over the last decade, India has built one of the world’s most extensive financial inclusion ecosystems. Digital identity, bank account penetration, mobile connectivity, real-time payments and consent-based data-sharing frameworks have connected hundreds of millions of citizens to the formal financial system. The next challenge is more ambitious: helping more households participate in long-term investing and build sustainable wealth.

In its latest report titled "Wealth inclusion in India: Expanding investor participation beyond metros”, EY highlights that as India’s economy grows, household prosperity rises and digital adoption deepens, the country is entering a new phase of financial evolution. The opportunity is no longer simply about access to financial services, but about enabling wealth creation in India at population scale.

A wealth inclusion opportunity of unprecedented scale

India’s financial infrastructure has achieved remarkable reach. There are approximately 480-500 million active UPI users and 660-680 million Aadhaar-linked PAN identities. Yet participation in investment products remains comparatively limited, with around 55 million mutual fund investors and approximately 48 million active equity market participants.

This gap represents one of the most significant opportunities for wealth inclusion in India. Millions of households are financially connected, digitally engaged and increasingly affluent, but have yet to transition from saving to investing. The challenge today is less about access and more about confidence, guidance and financial capability.

The broader economic implications are significant. A larger and more resilient domestic investor base can strengthen capital markets, improve capital formation and support long-term economic growth.

‘India’s investment landscape is undergoing a structural shift

India’s household asset mix is gradually evolving. Investable assets have grown to nearly US$5.2 trillion in FY25, increasing their share of total household assets to approximately 35% from 28% in FY15.

At the same time, individual participation in capital markets is rising. Individual investors now account for 18.7% of the Indian equity market through direct equity holdings and mutual fund investments, the highest level recorded in more than two decades. Aggregate individual ownership has also surpassed foreign portfolio investor ownership, marking an important shift in the ‘India investment landscape’.

However, India remains underpenetrated compared with many global markets. Mutual fund and equity allocations account for only 15%-20% of the market, compared with significantly higher levels in countries such as the US and Brazil. This highlights the scale of future growth potential.

Emerging investors in India could drive the next wave of growth

The next generation of investors is expected to come from several high-potential participation pools rather than a single segment. These include salaried households in Tier-2 and Tier-3 cities, women wealth creators, young professionals, Gen Z investors, entrepreneurs, business owners and emerging affluent households.

The geographic shift is already visible. Cities beyond the top 110 now contribute 19% of mutual fund assets under management, up from 10% in FY19. Districts beyond the top 10 account for 70% of NSE-registered investors trading in FY25, compared with 61% in FY21.

Women and younger investors are also becoming increasingly important. Investors under the age of 30 account for 40% of registered investors, up from 23% in FY19, while average mutual fund folio sizes among women have increased by 23% between FY19 and FY24.

These trends underline how emerging investors in India are reshaping participation patterns and expanding wealth creation beyond traditional metropolitan and affluent segments.

Why wealth participation remains a challenge

While access has scaled rapidly, participation has not kept pace. Many households continue to view investing as complex, volatile or difficult to evaluate. For first-time investors, concerns around risk, suitability, timing and outcomes often create hesitation.

A key barrier is the advice gap. Many future investors require education, reassurance and contextual support before making investment decisions, yet traditional advisory models struggle to serve these segments economically at scale.

The challenge is therefore not simply helping people start investing, but enabling them to remain invested, diversify appropriately and build long-term financial resilience.

The role of digital public infrastructure in wealth creation

India's Digital Public Infrastructure has already transformed financial access. Aadhaar, UPI, DigiLocker and Account Aggregator frameworks have reduced onboarding friction, lowered transaction costs and improved financial access at unprecedented scale.

The report signals that the next opportunity lies in extending these principles to investing and wealth management. The report proposes a “Wealth Stack” that combines digital identity, payments infrastructure, consent-based financial data, intelligence capabilities, advisory services and investor-protection mechanisms.

Central to this vision is the role of digital public infrastructure in wealth creation. By connecting existing infrastructure with better guidance and decision-support mechanisms, India can reduce barriers to participation and improve investor outcomes at scale.

AI as the next guidance infrastructure

Artificial intelligence could play a critical role in expanding access to personalised financial guidance. While Digital Public Infrastructure reduced the cost of financial access, AI has the potential to reduce the cost of financial advice.

AI can support investor profiling, financial planning, portfolio diagnostics, personalised education and behavioural coaching, helping institutions deliver more relevant guidance to a broader investor base.

Combined with human expertise and appropriate governance, AI can help bridge the advice gap and improve decision quality across the investor lifecycle.

Building wealth creation for Indian households

The future of investing may depend not only on awareness but on capability. Financial capability goes beyond understanding concepts; it is the ability to make informed decisions, navigate uncertainty and remain committed to long-term goals.  

This requires embedding guidance directly into investment journeys, supporting investors during key moments such as starting a SIP, responding to market volatility, reviewing portfolios or planning for retirement.

Ultimately, successful wealth creation for Indian households is likely to depend on helping individuals translate knowledge into action and build disciplined investing behaviours over time.

The future of wealth inclusion in India

By 2035, India can add more than 100 million additional long-term investors and build one of the world's largest investor ecosystems. The goal is not only to increase participation but to ensure that participation translates into sustainable outcomes.

The future of wealth inclusion in India may depend on how effectively infrastructure, advice, technology and financial capability work together. Success should be measured not only by account openings or assets under management, but by stronger financial resilience, better investment outcomes and broader participation in economic growth.