India’s $750-800 billion FPI pool- Nilesh Shah explains how India can secure more inflows

However, to maintain this investor confidence and accelerate its economic trajectory, it may be argued that India needs to undertake key reforms rather than rely on external factors.

In a recent interaction with ET Now, Nilesh Shah, Managing Director of Kotak Mahindra Asset Management, emphasized that India has already established itself as a structural growth story in global markets.

“It is not that people have not put trade in India on a structural basis. We still have close to $750-800 billion of FPI investment in listed companies. There could be another trillion dollars between private equity and FDI. So, people have put money on the structural growth story of India.”

Despite this substantial foreign investment, Shah believes that India must take bold policy measures to push its GDP growth into a higher trajectory. He pointed out that, currently, the country is growing at a mid-single-digit rate, saying, “Our GDP growth right now is in mid-single digit, five, six, seven. We are not able to take tough decisions on reforms like land reforms, labour reforms, farm reforms, judicial reforms.”

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He further stressed that while India has improved its ease of doing business rankings, there is still “a long distance to cover.”Also read: Gold hits $20 trillion milestone for the first time. Are you late to the party?

The key challenge for India is to push its growth rate higher, which, according to Shah, is necessary to attract capital on a structural basis. He stated, “If we want to attract money or capital on a structural basis, then our growth rate needs to go higher, not at the current rate. People have already put in money and they will continue to put money in India as long as we deliver on growth.”

Shah also discussed how external factors and geopolitical shifts have played a role in India’s attractiveness to investors. He remarked that while reforms are essential, India has benefited when its peers have made missteps.

“We either can pray for divine intervention where our peers score self-goals or we can take reforms and continue building on the foundation which we have laid to accelerate our growth rate to high single digit,” he said.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)