It is not because they do not want investments from these countries.
US residents must comply with FATCA(Foreign Account Tax Compliance Act). This act stops them from avoiding tax on gains made on Indian mutual funds. The US government signed this agreement with more than 50 countries including.
FATCA mandates Mutual Fund houses to report all accounts held by US Persons since August 31, 2015. Even joint folios are included in this reporting.
US/Canada residents can invest in Indian mutual funds easily. The curated list of such funds is available with online platforms like Jamawealth.com
