When should I sell my Indian mutual funds after becoming a US tax resident?

Timing matters because of the PFIC rules. Ideally, you sell Indian mutual funds before your first day as a US tax resident — while you're still taxed only under Indian rules — so the gain never enters the punitive US PFIC regime. If you've already become a US resident with the funds intact, the trap is partly sprung, and selling triggers excess-distribution treatment plus Form 8621; the longer you hold, the more the deferral interest charge compounds, so continuing to hold often makes it worse, not better. There's rarely a tax reason to keep PFIC funds once you're a US resident. The right sequence is fact-specific — basis, holding period, and prior elections all matter — so get a cross-border tax professional to model the unwind before you click sell. Don't reinvest the proceeds into more Indian funds.