India's market regulator has expanded rules allowing the country's $384 billion actively managed equity funds to increase allocations to gold and silver bullion. This change, effective immediately, grants these funds greater flexibility to diversify holdings beyond traditional stocks and bonds. The move comes as global demand for hard assets like gold surges, driven by inflation concerns and currency volatility.

By permitting higher exposure to precious metals, the Securities and Exchange Board of India (SEBI) aims to provide investors with enhanced hedging options and potentially stabilize returns during market turbulence. This shift could significantly alter portfolio strategies for India's largest mutual fund category, impacting asset allocation trends across the country's $385 billion fund industry.