India has signed a reciprocal agreement with the US government to share such information. Since Aug 2015, all financial institutions and intermediaries are required to ask their clients to declare whether they were born in the US, are US Citizens or Residents, have a US mailing address, etc. and share this information with the Indian government.
It’s now the law. But we’ve made it simple to comply with this. Just answer the online questionnaire and the Mutual Fund Company will keep that on information on record.