The son of the real estate mogul and star of the hit TV show The Apprentice, is understood to be moving in to the market with the help of other investors, including an Indian family.
Rapid growth in the south Asian nation's economy - which has given India the world's fastest-growing population of millionaires - is understood to have attracted Mr Trump's interest in the sector.
Speaking to Bloomberg in a telephone interview, he commented: "The fund will be for acquisitions of real estate in the high end, and across the spectrumâ¦the market place is beginning to understand and appreciate luxury, so there is a great opening for us there, as well as in resorts.''
He added: "Our entry has to be in Mumbai and that's where everything is going on right now in terms of the high-end real estateâ¦that's the place where one is going to achieve the highest prices per square foot.
"It sets the tone for all of the other future developments."
The 30-year-old has not yet made public how the money for the fund will be raised, or provided further details on the future investments.