Background: Previous studies document a mental health advantage in British Indian children, particularly for externalising problems. The causes of this advantage are unknown. Methods: Subjects were 13,836 White children and 361 Indian children aged 5-16 years from the English subsample of the British Child and Adolescent Mental Health Surveys. The primary mental health outcome was the parent Strengths and Difficulties Questionnaire (SDQ). Mental health was also assessed using the teacher and child SDQs; diagnostic interviews with parents, teachers and children; and multi-informant clinician-rated diagnoses. Multiple child, family, school and area factors were examined as possible mediators or confounders in explaining observed ethnic differences. Results: Indian children had a large advantage for externalising problems and disorders, and little or no difference for internalising problems and disorders. This was observed across all mental health outcomes, including teacher-reported and diagnostic interview measures. Detailed psychometric analyses provided no suggestion of information bias. The Indian advantage for externalising problems was partly mediated by Indian children being more likely to live in two-parent families and less likely to have academic difficulties. Yet after adjusting for these and all other covariates, the unexplained Indian advantage only reduced by about a quarter (from 1.08 to 0.71 parent SDQ points) and remained highly significant (p less than 0.001). This Indian advantage was largely confined to families of low socio-economic position. Conclusion: The Indian mental health advantage is real and is specific to externalising problems. Family type and academic abilities mediate part of the advantage, but most is not explained by major risk factors. Likewise unexplained is the absence in Indian children of a socio-economic gradient in mental health. Further investigation of the Indian advantage may yield insights into novel ways to promote child mental health and child mental health equity in all ethnic groups.