Direct Funds have been introduced in the mutual fund space in the last few years. The Securities and Exchange Board of India (SEBI) in January 2013 made it compulsory for all Asset Management Companies (i.e. Mutual Fund companies) to allow investors to invest in mutual fund schemes directly via direct plans as opposed to via agents, brokers or distributors, as is the case with regular fund plans.
Direct funds don’t have annual commissions that usually go to agents etc. and therefore they are cheaper for the investors and the saved commissions get added to the returns of the investments each year. You can read more about it here.
You can switch to direct Mutual Funds very easily by importing your portfolio through the external investments section and then moving them to your goals. When you do that, it will switch the funds to their direct counterparts if you so wish. This is completely free of cost for you.