URGENT WARNING-- What's going wrong with India's Economy? | Akshat Shrivastava

追加: 2026-05-19

[00:00:07]Hi everyone. So a lot of powerful people have started issuing negative commentary on the Indian economy. For example, Mr. Odek said that we need to be prepared for the worst. Prime Minister Modi, this is the second time that he's saying that you know what we need to be prepared for bad things. So but no one is telling you exact concrete thing what is wrong in the Indian economy. Okay. So I'm going to do three things. Number one, I'm going to discuss what the precise problem is in the Indian economy. I'm going to help you understand and make reasonable guesses what's going to happen next. Okay, that's one. Second, I will tell you not to panic, right? Do not panic sell anything, but start preparing a plan. This is very very important. Three, I'm going to give you five actionable insights as to what you can start applying now right away.

[00:00:52]Right, starting today. Now many people say that you know you speak wrong about the Indian economy or negative about the Indian. Guys my job is not to be positive or negative. My job is to present you realistic picture. Okay. So that you are better prepared because honestly like zero people are looking after your wealth. Okay. Now if I'm giving you honest commentary even if it is a bitter pill at least look at it.

[00:01:15]Okay. Fine. Finally it's your call what you wish to do with that money but at least listen to a contrary opinion.

[00:01:21]people who did that two three years back right when I started diversifying into the US market global markets started building that global investing community people have benefited immensely okay why because all these things or all these things can be read through macros it's not as if that I was a genius and I was able to pick up these cues but what ends up happening is that when you close your brain and you're not looking at the picture realistically it leads to problems so please watch this video with an open mind let's jump right in without wasting any time so let's first and foremost discuss what is the structural issue and the editor of the Indian Express has expressed it in a good way.

[00:01:54]So I'll explain you that equation what he has spoken about. This will help you parse through the logic. Okay. So you'll see the logic then accordingly you can build a plan that kind of helps you out.

[00:02:03]Okay. Okay. So here is equation number one that you need to understand mathematically. Okay. So basically what India is facing is something called as fiscal account crisis in a way. Okay.

[00:02:12]Now fiscal account basically comprises of our current account. Okay. And capital account. So for example, all of us maintain our bank balances, savings account and all that. Right? So our company has corporate account. We have savings account. Similarly, our nation has current account and capital account.

[00:02:27]Now current account basically means exports minus imports. Okay. Now India is a net importer country especially on energy. We import a lot of things and we import like goods, we import services.

[00:02:40]Similarly, India exports goods and services as well. But net net we run a current account deficit because uh we are a fast hungry nation we are growing etc etc. So as a result we consume a lot more then we end up exporting right. So our current account is usually always negative. Okay. So this is a structural issue. This has always been the case not just with the current government but it has been a case for last several decades that we have consistently run current account deficit. Okay. Now a nation also has something called as capital account.

[00:03:14]Now capital account is basically kind of an investment account. Okay. Now this investment account the way it works is that we have foreign capital coming in and we have foreign investments and we have like domestic investments which is flowing out. Now as long as foreign investments are coming in and our domestic investments are not flowing out much this creates a positive effect right and it is able to balance this current account deficit out. Okay. So if you have a large plus plus plus plus here capital account and a little bit of negative here then the equation kind of gets managed and what was happening is that as India was growing a lot of growth story we were we were an emerging market our IT services were doing very well right so as a result there was a lot of inflow of capital that was happening like startup lot of cities got built like Pune Bangalore Hyderabad right around startup/IT so why because this capital account was kind of positive. Okay. So a lot of foreign investments were coming in right and domestic investment was not leaving that fast. But what is happening now is that see we are in a structural phase where current account will remain negative.

[00:04:24]This is not going to turn positive because we have not really worked out on our exports and at the same time the domestic capital is trying to leave the market right. Why? Because a lot of currency fall is happening. Bunch of other different problems are happening.

[00:04:38]Indian market not growing fast.

[00:04:40]investment market not growing fast. Fi have not been net investors in the Indian market for the last 6 years now right since 2020 that is not happening.

[00:04:49]I've made a lot of videos right but if you just put this on this equation we are able to understand the structural flow. Okay. Now what this leads to do is that this creates a growth trap. Now what is the meaning of growth trap?

[00:05:01]Let's see if here we are negative right foreign capital is not coming and we are consistently running current account deficit and capital account deficit in a way there is like no investment happening right because the total amount of money in our economy is kind of drying out right now if no investment is happening then what will happen right okay no jobs now if no jobs then no growth because growth right so and if no growth then further people do not bet on the Indian economy and kind of investment ments die. Okay. So we get into a growth trap, right? And therefore Modi G and bunch of other business people they are saying that you know what we need to be prepared for bad things. Right? Now if I were to just quickly decode right for example if we decode like udot g's statement now he's a rich billionaire right in India he has made a lot of money in India a lot of surplus wealth is sitting with companies like TCS Infosys even like Mahindra maybe uh they have a lot of money right now a natural response that I keep on reading from a lot of our uh people who comment on my videos that you know what okay IT services were like bad right why they did not invest in like R&D Narayan Morti did not make invest ments this this person did not make investment right fine right I mean if you actually understand why should a company invest okay so for example let's pick the case study of TCS okay now TCS where do you think it will invest and why do you think it will invest okay so there are two parts to this where will it invest and why will it invest right now the why is very obvious that okay if you are investing in let's say R&D right now what is it that you're trying to build well you're trying to build something called as intellectual capital or IPS okay intellectual property is for corporate language so intellectual property for example patents we have some kind of high-end technology we have right now this is patent protected now how how are patents protected in India well they are protected by law okay now the moment you start looking at it that okay fine TCS spends crazy ton of money right it burns it's like billions of dollars that it is sitting on its cash reserves creating this IP now in India up. Unfortunately, the problem is that the corporate IPs are not strong. Okay, maybe TCS will build invest a lot of money in R&D, build something and that thing will get copied by someone and it will not be able to sort it out on court. Now you say a you are being negative. No, I'm not being negative guys. There have been a lot of cases for example even if you look at retrospective taxation read about like you know a lot of why do many uh foreign players leave Indian market altogether.

[00:07:40]This is number one reason right that that hardly any money goes to R&D and this is not happening. Okay. Uh this is problem number one. Problem number two is favorism. Okay. So there are three four core capitalists who are commanding like every business in India right like telephone rights handle right?

[00:07:59]Everything is handled by like two people now they become like very fat. Okay. And now there is no incentive for like you know TRB players to go and kind of compete within the Indian market. They constantly keep on asking the question that boss R&D maybe it will you know just die with it right and what's the point so we will just get rich ourselves and we'll figure out what to do next whenever the situation kind of improves right so this is the thought process I'm just telling you right what what the situation on ground is now you make a call whether it kind of makes sense not makes sense okay so creating that market and having a market that kind of absorbs that R&D that is just not there okay so the entire argument that India will somehow go and innovate for that you need conducive laws to begin with which are not there and which will take decades to change okay so this is the situation I explained you two things now what ends up happening right now is this something to worry about right I mean is this something that you should say okay fine not okay so should we just cut everything move out of India will India go to zero uh will anything be left in India see number one please do not panic okay you have to be a little bit rational you have to understand that there's a direction that economy takes for example we are unfortunately on a downward sloping curve. Okay. Now this takes decades to play out. So yes on a long frame basis we are in a bad shape. This is unlikely to change and you should diversify because of that reason. But in the short term that does not mean that you panic sell the Indian market and go away. Okay. So for this let me take take you to the market chart first right and tell you what is precisely going to happen right in the next few years in India. Okay. So here is the situation right. So for example if you take a look at Nifty50 right? So basically for the last 2 years we have been just dancing in this range and nothing has happened right now if I ask you a very simple question that see boss we were here at like 23 500 levels here again we are at 23 500 levels how much do you think India has lost right or how much money you have lost in the Indian market your answer will be the question right I mean you have lost 0% right yes okay no you have not lost 0% you have lost 2 years of compounding plus we have lost INR depreciation okay because in this 2 years right at least INR has gone down by 12 13%. Okay. So our total net loss has been 12 13% plus 2 years of time loss. Okay. Now this is something that we don't understand. What we understand is that some fund manager is going to come on some random podcast and tell you that if you invest like 25,000 for the next 25 years you will earn like 250 crores or something that looks like extremely good to us. Okay. We don't apply our brain here. Okay. So what is going to happen next is that see we are still going to move like this. Okay. Or we might have a breakout. Who knows right now? What is on a 10-year time frame likely going to happen is that in 10 year maybe we'll make like 150% returns or something right now. Is this amazing? Not really. Right? I mean in 10 years 150% is not like crazy kagger. But in this 10year time frame, we can at least expect a 4 to 7% INR fall each year. Okay. Now it might not happen like maybe one year we recover then we get dumped again. Why? Because again go back to that equation that I was telling you.

[00:11:08]that equation is holding true right so this is the bottom line right now in case you're someone who is panicking that you know what okay should I just take my money out of the Indian market not take see Indian market is a diversification bet if you have 100 units of money in the equity market you can decide that okay I want to do like 20% 30% allocation to the Indian market rest others or 50/50 or 6040 whatever ratio you want to follow okay so this is not time to panic sell wait for a rise wait for the sentiments to improve then you can accordingly adjust your split in the Indian equity market. So this is one. Second key point if we look at hard assets. Now here is a snippet right about silver right that there are restrictions being brought even on silver purchases. Okay gold restriction in terms of purchase has already been brought for example the import duty has been changed. So if you started buying gold post Modi G speech now this has gone up by 10 15%. Okay, just immediately after the speech. Why?

[00:12:03]Because these act like gold, silver, right? These are investable instruments in India which are legal. So you there's no illegality in terms of buying gold and silver. And this acts as a hedge to what? This acts as a hedge to INR. Okay.

[00:12:18]So if you are building a hedge to INR, you can actually do this right away.

[00:12:22]Right. So there is no problem in terms of building a hedge to INR. So for example, if you are keeping 100 rupees in your bank, this is likely to lose 4 to 7% compared to US dollar. Okay. But if you invest this money in gold or hard assets, then this depreciation is unlikely to happen because gold silver is likely to do better than INR. Okay.

[00:12:43]So this is the bottom line. Now there is third option. For example, you can invest your money legally in something called as US dollar. Now how will you invest money in US dollar? Well, it's straightforward. Okay. So, there is something called as FCNR. Okay. So, under FCNR, you can invest $250,000 out of India as an Indian tax resident.

[00:13:04]Now, if you're doing that then you can then you'll say that okay you know what I cannot get my bank account opened in America or bank account opened in Singapore or Dubai. What what what can I legally do? Okay. So, you can open up like brokerage account for example. You can open something like vested. Okay.

[00:13:19]And you can start your investing directly in US stocks. uh Google Meta all this stuff now that is a legal way of converting your INR into US dollar.

[00:13:30]Now this is an action that you can take.

[00:13:32]This is there right? Many people ask me that hey what happens to real estate?

[00:13:35]See real estate is also a part hard asset. Now what is the meaning of part hard assets? See if you're buying land now is it better to keep like 1 cr in cash or 1 cr in land. Okay. Because it will go up in value and there is only only limited parcels of land. So it's a hard asset. Okay. Now next if you buy like some flat. Okay. Now there are so many flats being made. So is it a hard asset? It's debatable, right? Because almost infinite supply of flats can be created even in locations like Mumbai, right? There is redevelopment after redevelopment that is happening. So that is there. Now if you are an NRI, now NRIs have this crazy habit of sending money from abroad to India. Okay, that they will have their US dollar. They will pick that $100,000, send it to India, witness five years of INR depreciation, then bring that money back. Okay, so this is a very interesting tweet that someone did about their uh thought process of investing in the Indian market. What ended up happening that despite making profits, the person ended up locking getting like minus 20% on his US dollar return. Now this was like crazy, right? I mean so these type of stories happen on real estate, these type of stories happen on equities. These type of stories happen on a bunch of different assets. So what you need to do is that you need to understand that see boss, what is my next best option? So number one, you should not panic sell for sure. Number two, decide a split that hey, I'm going to keep like this much money in Indian equities versus other. Number three, if you are an Indian tax resident, you have different approach. For example, you can buy gold, silver, etc. Uh if you want to buy land, it's fine, not a problem. I was one of the early proponents of diversified investing, right? I continued to buy hard assets, okay? And that has really benefited. I continue to advocate diversified investing. NRIs if you keep your money in strong currencies it's much better right you guys do not have the compulsion you know you have to buy gold or silver or something like this just keep save your money in like hard assets it's better so these are the points that I will tell you okay then comes a very natural sentimental response to this entire topic that okay Modi G said number one please please please save petrol okay and he has appealed that do not spend too much on energy and all this stuff he also advocated work from home, right? He also advocated no travel especially abroad, right? Now, why? Because again, if we go to that equation that hey, if you travel abroad, if you go to whatever like Malaysia and Singapore, wherever, right, you're essentially spending INR and buying US dollar or Singapore dollars or whatever. Okay, Modi, right? Modi G then went on a five, you know, five country trip or whatever, right? I mean, he himself is not blocking his travel, okay? He himself is not cutting his patrol, right? He himself is not working from home. Okay. So, right and then eventually if you end up executing things that's a different thing. So, you have to understand the practical gravity of the situation and accordingly act. Okay. Now, you can target me that you know what you like and whatever right so what I'm simply getting at is that see guys there is an emotional appeal and there is a practical side of things. Now emotional appeal is great as long as you are the one not kind of going through the grind. For example, you would have seen a lot of politicians blabbering absolute right? But sending their own kids abroad, right? That's emotional. They just manipulate you emotionally. There is just no point, right? Practically you have to understand the concept, right? And I'll give you like a very stark reality that see if you are sitting on let's say 5 cr of wealth and if you listen to all this okay and you make no effort of diversifying your wealth abroad via LRS uh converting into hard asset right uh investing in growth assets uh hedging yourself in terms of INR depreciation by this five cr of asset will quickly come down in value within a matter of a decade it will come down okay if you do not trust me just go back 10 15 years back think what 1 cr could have bought you right it could have easily bought you like a 3 4 bedroomedroom villa in Goa okay easily easily right 1 one and a2 cr now go and check ask anyone right if you like that okay in 1 and a half cr can I buy a villa right it cannot be done right so please understand that every month that you wait just going through all this emotional things right it's not going to help you. In India, we do not have the concept of social security. If you lose your 5 cr, it's gone. No one is going to help you out. So, this brings me to five practical points that I promised, right?

[00:18:10]I will recap the video and give you these five practical points. Number one, if you are someone with not a lot of spare income, forget about investing for the next 6 to 12 months. Okay? Being very very honest. Just simply create a savings bucket. just simply save your 6 to 18 months of your expenses in a FD account or whatever. Will that uh will that thing come down? Yes. But given so much volatility is there, no new investments are coming, maybe corporates will not put more money in uh into the Indian economy anytime soon. We don't know what's going to happen. So there's a very high chance of job disruption. So during job disruptions, you do not think about like you know investment growing and you know going 10x, 5x. Basically think about survival right that's very very important okay number two if you're someone with discretionary income please use practical sense please diversify your wealth pick that okay how much investments do I need to keep in India versus abroad LRS is 100% legal my advice is that directly do it yourself do not depend on Indian mutual funds to diversify your wealth via some route no that just directly go and buy US stocks or whichever stocks you like right but diversify globally that's number Number three point is for NRIs. I had covered this that please save in stronger currencies like Swiss Frank, Singapore dollars, uh dirhams with respect to US dollar, US dollar. These are all fine currencies. People have been talking a lot about de you know dd dollararization honestly like you tell me guys I mean US is getting stronger by the day. They are capturing like you know supply lines on energy and whatn not partnering up with China instructing India what to do versus not. It's getting stronger right? I mean fine right when we talk about dd dollararization dollar will go down in value compared to gold okay but that does not mean that dollar is going to zero other weaker currencies will suffer much much more and US will continue to export its inflation to the world that is already happening that will continue to happen it has already escalated at a rapid pace this is third fourth if you don't understand much investing just leave it okay just simply go and buy hard assets not an issue right uh please understand the meaning of hard assets.

[00:20:20]buy like small plots not an issue right as long as you have that and some liquid investments it's fine just don't invest like everything in a plot right because you always require liquid money that's point number four point number five that invest as per valuations make your decisions as per valuations now what is the meaning of valuation for example see I mean there is a good chance that Indian market reverts right this is called as mean reversion mean reversion means that okay Indian market that it will rebound Right. Uh now what might happen is that we might end up going to a very high PE. So always track earnings of the company or earnings of the entire index. If Indian index becomes bloated, it's very unlikely that we will command high PE now right for a substantial future. So you need to be sensible in terms of judging the PE ratio and making investments accordingly. Now I teach all this advanced stuff on my investing community also. In case you're someone who is looking to gain understanding of global investing, how to diversify, how to ace investing when I teach fairly advanced topics. Uh people have really loved it, right? People have made a lot of money.

[00:21:26]So in case you are keen, do check the links in description comment box. I hope you enjoyed this video. If you did, do press the like button and I'll see you soon.