ESG (Environmental, Social, and Governance) investment has become more popular in India in recent years, drawing interest from both asset management firms and individuals. This study uses five years of monthly data to examine the performance of equity and ESG mutual funds in the Indian market. The study assesses each fund type's risk-return profile and investment efficiency by looking at important indicators such the Sharpe Ratio, Jensen's Alpha, and beta. The results reveal that while ESG funds demonstrate lower volatility, equity mutual funds generally deliver stronger returns and better risk-adjusted performance. There is variety in fund performance, though, since some ESG funds do perform better than their stock counterparts. To determine if differences between fund pairings are statistically significant, the study uses a paired Z-test. For scholars, investors, fund managers, and policymakers, this study offers insightful information about the increasing importance of ESG investment in India. The methodology is based on an organized literature research and an analysis of secondary data obtained from financial platforms. Despite greater awareness, ESG investments in India are still in a developing phase compared to global trends, with investor hesitancy toward ESG integration posing an obstacle to broader adoption. Keywords: ESG Mutual Funds, Equity Mutual Funds, Sustainable Investing, Indian Mutual Fund Market, Risk-Adjusted Returns, Sharpe Ratio, Jensen’s Alpha, Beta Analysis, Performance Comparison, Nifty 50.