Indian Economy DEAD OR DEADLY? A Reality Check, FII, Stock Market, Indian Rupee I Sanjay Srivastava

追加: 2026-06-07

[00:00:03]Welcome to talks before has been the board of directors at Mahindra World City. you know leadership so let's try and understand sir welcome to the show thank you so much for inviting me on the show great to be here so I think uh your show timing is just perfect I thing is the road from dead to deadly just got traversed in the last 24 hours. So leaving the headlines we let's dive in into what is actually happening sir. So you know there's what o g the the GDP has come down g this has happened that has happened there's a lot of these calculy comments a lot of people have started making those calculy comments yeah the calculation is like this that this that just you know in basic simple two three minutes just help us understand the main thing everybody talks about is the GDP number you know firstly we we've started saying yeah GDP P is not the right way to measure different. So what's your opinion? Just throw some light and where do we stand as we are in India?

[00:01:50]>> Sure. So I think uh this this fundamental question it fundament it is a classic dichotomy between what is actually we are seeing in the headline which is everything seems to be gray and gloomy and visav what is actually happening on ground and I think yesterday as you talked of the from dead to deadly the we saw the latest GDP estimates come in we've got 7.8% 8% for the Jan to March quarter. You've got a full year of 7.7%.

[00:02:26]And these are not uh easy numbers considering all the global turmoil which is happening. So when uh we see these kind of numbers in fact world's fastest growing economy and at the kind of scale and complexity we have then that really means is we have to look at what is actually happening on ground and what is actually happening on ground if you see is possibly three cylinders continuously firing on all guns blazing. We are seeing manufacturing really picking up.

[00:03:00]Lot of people have been saying manufacturing near in the last uh just last week we saw the fastest PMI in manufacturing services of course is our core bread and butter and when these two things are supported by enabling uh regulations or enablements which further accelerate this then there's no no reason the numbers are very clear that uh the growth is actually happening on ground >> when you see the pattern of course there is a slowdown growth slow down to >> right from 7.5 now we are projecting 6.6 six I think we'll close seven 7.1 why can't people come out and say boss we will grow 7 plus% you know we should be a little this thing you know our so so-called economic institutions they don't want to come out and openly say it builds a lot of confidence in the market but no this is so no we'll keep it low conservative figure of 6.6%.

[00:04:10]I I'm not able to understand why. But so the main question people are asking $500 billion has left the market that is your FI and FBI and all these I have counterargument key guys what you need to see is the long-term and the short term structural Correct.

[00:04:43]>> Help us understand this game.

[00:04:48]What what is this?

[00:04:50]>> Sure. Uh so I think let's break it out into two parts. one as you talked about the structural growth which is the FDI and from a gross FDI perspective if you see year on year we have been growing at the highest level even last last financial year number which has come as we are 90 plus billion so it is the highest ever level now the concern which is the two part one is the net FDI has come down because people have also repatriated secondly the FIS or the FBI continuously pulling out the uh the capital. So I think they are driven by two different uh aspects. the FDI which is getting pulled down that is really a long-term investment done by the private equity venture capital folks and uh all of them have a typical 5 to seven year kind of a cycle where they have to produce the return and return the money back to their uh LPS. So the fact that actually FDI is also flowing it really represents that the businesses have done well only then because no FDI is going on a loss. So the fact that people have made money and they are going out that also gives that uh it's actually a two-way free flow and the businesses have done well. The second aspect related to FDI is even if the capital has gone but fundamentally someone invested into a manufacturing, someone invested into a fintech, someone invested into a services economy, that business is still there, the growth which has happened, the uh the employment which is still generated, the GDP generation which is happening from initial investment, all of that is still there as you mentioned everyone wants to book a profit once in a while they have to do it and if you see the fact that if the investments are still coming at a higher level then that means people have the confidence that in the next cycle I'll make better money now coming to the FI which is which has been the biggest concern and I think uh there are two factors here the key factor is one is the global crisis which is something which is not in our control and triggering from there the uh risk of mechanism and globally all these FIS and FBI they have a very strict mechanism of what happens when a riskoff mode is there. So with the global risk of modeon the US yield rates are have increased everyone wants to be conservative in that case the even in domestic that is true right so if everyone wants to be conservative all which is happening is the fis and FBI they pulling it up and taking it back home to wait for a better date and the second aspect which is which has been a trigger is uh there's been a lot of hype on AI and high-tech and especially especially countries like Japan uh Korea uh with uh Taiwan and uh we have we do not have a AI high-tech portfolio so as to say so companies are just rotating but that if we really want we as you said we wanted we want to play the structured res resilient long-term game. So we are okay if some of that hot money goes off. If just yesterday if you see I think Cosby went down by some 20 in two days uh tons of uh microchip guys are down in a 10% in a day. So that rotation will happen. Maybe the market is the hottest markets are there and just like how FIS and FBI have taken the their current profit. It's quite possible the next sector rotation will happen and then we are poised for that.

[00:09:23]>> So what do you see sir? This is what temporary because people are kind of uh booking profits. What is it? I mean >> yes. So as I said uh two things one is the riskoff mode. So moment a riskoff mode comes I and I've seen this cycle as a CEO for almost last 20 years. It happened in GFC. It happened in uh even the com bust mode. that moment the risk off mode happens the internal processes kick off that you have to move the capital to secure uh capital right so there so some of that is uh due to riskoff mode second is as I said due to the high-tech uh boom but it will come back and today if you're seeing the FDI is already coming the fact that as I said that despite after the profit cycle we are still seeing it's like almost a higher high being made in the FDI investment. So if that is coming in same way if the global sector rotation happens m maybe last one week is just a uh small sample but if that sector rotation starts almost everyone is feeling that the AI boom and the high-tech uh semiconductor uh uh stocks are all in overvalued moment that rotation starts ultimately it is the value which will drive the fiis and everyone else and the fact that we are the fastest growing economy. It is only logical that uh the flow we will have a fair share of that flow coming to us may not be immediately but over the next 6 to 12 months that re renewed buildup happens and I think uh that's where we see the government acting as a enabler. So just yesterday you and I we were just discussing right we saw whatever can be done to ensure a certain degree of comfort it has been done on a growth side RBI staying at 5.25% 25% so that they don't touch the credit growth this has been there about 16%. But we have given concessions to FIS for uh investing in government bonds. We have given uh we have we are encouraging them to invest in long-term 15 to 40year kind of a sovereign bonds.

[00:11:55]The RBI is also guaranteeing uh FCNR accounts to ensure that the hedging risk will actually be funded by RBI and Ministry of Finance and uh I think there some preliminary estimates came that uh between now and in September October where some of these measures are uh operational we may see about 30 to 50 billion of uh foreign for foreign capital coming M >> so this this change which has happened right now you know uh that we can see um job you know the the government of India and the RBI have actually given some some benefits what do you think is the target s basically bringing in dollars my analysis said key boss this is about getting the dollars back inside the country get the dollars back dollar flow back score and uh figure out how you want to kind of move forward after that.

[00:13:00]>> Absolutely. So if you see right now the key pressure which was coming was from our side was twofold. One is the current account deficit and secondly is the with the rising oil prices and that's where uh both of them put pressure on forex outgo and currently while we say we have close to about 680 to 700 billion dollars which easily covers about 10 to 12 uh months of uh uh our requirement.

[00:13:30]The fundamental focus is how can we ensure we have more dollars. So it's always good to build a cushion for a rainy day. So you build in that cushion and use that cushion to leverage what is our foundational strength. And I think from our perspective the foundational strength I see is three key things. One is the growth which is clearly being driven. Second is the policy which is supporting both from a fiscal policy as well as the various uh manufacturing and other policies. And the third is the banks have a very clean balance sheet.

[00:14:10]So therefore their ability to fund this growth uh will come in. So we use dollars come in let this be the three-way platform and that we jump start and at some point possibly over the next uh by later this year or early next year uh the crisis starts moving to some logical uh resolution and uh then we are ready. So we are not waiting for crisis to end. we pivot and we uh be ready to work in the best conditions deal take the cards as we are dealt with and do the best. Sir, so one major question that comes across and a lot of people say the amount of freebies and everything like that which is being given today right that puts a lot of huge amount of pressure on the execer which is which is which is actually true but is it just freebies sir I mean this is one question that is plaguing me because see what happens is if you're putting money in somebody's account he's going to spend it right so it increases your consumption to a certain extent And secondly to a person who was buying I mean let's say a you know person not very affluent you know salary economic strata I was he gets rice dal and probably ata.

[00:15:41]So he says yeah this is taken care of let me get some fruits vegetables milk some chicken some fish for my family or whatever it is. Uh doesn't this actually you know spate a different kind of consumption?

[00:15:57]>> Absolutely. your you're bang on Adi because uh I think uh this is where an integrated views has to be taken and as you said that people are only looking at uh this freebies being given uh and hence it's bad but in a certain condition it is required and the fact as you said it's almost like uh it's a consumer engine driver because once you take care of the basic food health which is also So you have now Aayush manat uh then whatever is available either as a freebie or actually is given as a direct benefit scheme the the natural aspiration combined with the education combined with the the new youth which is coming in there they will actually use their money somewhere they will use it for consuming say uh the milk the better products. Uh everyone has aspirations. The mobile is one uh big consumption thing. Secondly, uh so many new products are coming in and the new generation which is there if you see whether they're looking for clothes, they're looking for textile, they're looking for entertainment, they're looking for cucumbers. So all of that has come in. So I think your point is absolutely valid that when a freebie is given it it has a two-fold effect. First it takes care of person's core uh needs.

[00:17:35]So almost addressing the core of the Maslo's hierarchy and when the person moves up then it is a consumptiondriven uh growth and that is possibly represented by the fact that uh I think India is among the few emerging countries where more than 60% of our GDP is driven by domestic consumption and that's what is actually helping us withstand uh any of the crisis unless we compare with our uh f our neighbor which is uh which has got just 30% of domestic consumption and rest is all dependent on either exports or uh state-owned enterprises. We are not at that mercy >> because for me you know yes there is of course dependency create you know it creates a dependency of a certain section of uh people uh you know on your uh what do you call you know, on your uh government and you know, they're expecting the food, they're expecting this thing, that thing. But, you know, there has to be an upside to it and that's something I've been thinking about. What is the upside? It's not just boats.

[00:18:49]What is the economic value that we get out of it? So uh so I think the economic value which we really get is uh uh when the basic food, health and even education when these three things are being taken care of then the cash which is coming in that cash is actually definitely going to consume a whole set of goods and services and that has a significant multiplier. one the consumption demand goes up secondly the companies which are operating in that whether it's a manufacturing FMCG or any or say even Q commerce they they see that demand traction coming up so that demand traction comes up and that leads to their revenue growth that leads to that GDP uh generation and when that picks up then then you need more employment the same set of people who are now have the education don't have to worry about food security and health then they are also available to uh take up the jobs which are being uh generated and that jobs has a today's I think uh the portfolio of jobs if you see there is a very wide diverse portfolio right from actually uh people working to just be the qcommerce folks to actually people managing the logistics warehouse to people working in startups and actually developing the space tech and deep tech. So you have the complete range which comes in and that's how I think uh the multiplier of uh uh GDP growth, employment generation and the overall ultimately the economic growth it goes as a virtuous cycle. I hope that uh addresses it.

[00:20:45]You know that's something I've been thinking about for a while now. What what do we kind of how do we understand this entire thing because there has to be the economic angle to it. It's not just governments are spending money that there there has to be the down the line impact for it. That's interesting. So lastly in the last section I want to ask you about two major things. One is the stock market right a lot of people judge the economy. Oh yeah stock market.

[00:21:10]Okay that doesn't make sense. The the last time I saw a direct connection between the stock market and the economy is probably when Donald Trump speaks about it but beyond that I've not seen anything is about the rupee.

[00:21:24]Now there's a notional value.

[00:21:29]So what is the reality? Can you put both these things into perspective also?

[00:21:34]>> Uh sure. So I think as uh you said that uh ultimately the value which will be driven in stock market it will come from the factor of what is happening uh in their real world business and it's like uh we get up every day and we see what's the weather like which is possibly a daily moment.

[00:22:06]suddenly it's a good day but actually you are in the summer season right so I think that is a difference between stock market uh visav what is the real value the there are series of factors which may be adding to volatility is almost like a daily season but what we have to see is which season we are and the fact that we are looking at a significant GDP growth uh combined with manufacturing growth combined with uh uh new PLIS which have come in which is bringing in industries which we had earlier not thought of in uh whether it's electronic semiconductor and then the services which is of course and services now taking a new form and GCC etc. So the we this is the India season and when the India season is there ultimately which will come up even if I take the stock market if you really look how much has the stock market gone compared to the volatility right in at a broad level it is still moved only from about 10 to 15% of its highest uh growth so that's not a big volatility secondly if you slice it down in fact I was just looking uh in the middle of the week uh the Nifty India manufacturing index uh just from April 1 to now it is nearly it's uh just till two weeks back it it had already hit a its all-time high so the fact is that there are green shoots which are coming in uh we look at the new uh things which are coming in defense uh we look at aerospace we look at semiconductor >> infrastructure of insurance significant investments which is coming like just to pull in one interesting data which we I saw from last year's uh merchandise export data which we which came out of the 40 plus billion dollars the interesting thing was there was almost 200 plus million dollars of new product country codes which were exported which were never done and this shows that The nature of our growth is actually becoming very different as you talked of we are getting into shipping we are getting into new countries Northeast Asia Asia pack we are quickly pivoting to new areas. So when all of that will come in definitely the stock market will ultimately is ultimately driven by price price earnings and value driven. So the the season is ours. Yeah. So I think that is uh really when uh what I see about the uh stock market.

[00:25:02]>> What about the rupee sir?

[00:25:04]>> Yeah. So rupee as uh there have been a lot of discussion will rupee hit 100 it may it may not I don't think anyone has the uh view what we have to see is uh in fact just yesterday I saw Dr. Shamear Rai talking about a very interesting conversation is where she talked of that when you have multiple pressure points building up you look at it you ultimately need some uh WVE to release that pressure and I think now the way how uh the dollar rupee is playing it may be that wallve to reflect the current account deficit as well as the oil and the energy pressure And that's where the fact that uh if we are taking the right uh measures which we which yesterday got announced I think uh uh within few hours the rupee saw the highest uh recovery in the last 3 months and it it uh it again touched 95. So the fact is uh uh rupee may stay volatile but I think overall direction if we stay if we stay competitive we continue to generate more manufacturing goods we ensure that our exports leverage we have close to some 9 to 10 ft coming in the n in the next uh few months if you leverage all that then the wave value it will automatically appreciate and in fact two interesting things I want to say about the rupee depreciation.

[00:26:49]One is generally if the rupee has gone down in a way if our focus is exports manufacturing new products and services then all of those uh just like we are having pressure on oil and energy the and some imports the reverse script is also positive for us. So the exporters are benefiting, the services are benefiting because we are becoming more competitive and uh the second point I wanted to bring in if uh we see the Chinese yen to INR in fact the Chinese yen has appreciated by almost 20% visav INR. So in a way everyone who's looking at a China plus one strategy and this is every day we see announcements. So in a way it is act it is automatically making India more competitive country to be there. So in a way I see that that this is an advantage. I think every day we see some global executives coming and uh talking about that India is the place to be. Just two days back I think the city global CEO and their leadership team was there and I think uh they uh issued a a a notice saying uh India is the best place to be in >> and when they are saying that I don't think they're saying this is not city's view this is city's outlook built on their global customers so so therefore it is they are ultimately representing their uh customers.

[00:28:34]Similarly, I think the K the Karnney global MD was there uh uh last Fortnite and he said if there is a single market which any of the companies need to be there, it has to be India. So the fact is uh everyone understands that there is a short-term challenge. there are short-term dark clouds but I think uh India's time to stand in the sunshine uh nothing can stop that that's what I think >> lastly so last question is about when you look at economic structure there have been shocks after shocks after shocks right you've just had this war which is another shock we started with went into Ukraine went into Israel and Hamas and now now this on and I'm sure a view you know geopolitically if you analyze I think the next war is coming already. Uh is India trying to shockproof itself?

[00:29:37]uh I I don't think we have a choice right we >> what are we going to do >> uh I think two three key things I see uh key initiatives uh which I see one is uh to sustain the domestic demand which is there second is I think uh to move up the value chain in order to how do we really capture higher value and uh if you just take one example among the various PLI with over two lakh crores of investment and close to uh 15 to 20 lakh crone of uh revenue which is generation.

[00:30:14]If you just pick up electronics and mobile that itself has actually reached a stage where we are currently at about 20 to 23% of the value addition and the clear PLI2.0 to which is coming for mobile it's clearly driving a very ambitious agenda to move that value addition to 55%. So when you are when you will actually have the higher value captured both your top line as well as your profitability uh will increase. The third thing which I see is India is consciously working even within manufacturing to look at what are the high growth drivers for future which will have both the dual demand of good domestic demand as well as exports and build on it and that's where I think uh if you if you see aerospace and defense we see uh drones phones. We see uh even semiconductors.

[00:31:25]The fact that 12 plants are under under uh WIP and two of them are supposed to go live uh with just uh within this year.

[00:31:39]The fact that uh close to about 15 FTAs are already signed and they're going operational at an end to end level. So that that is ensuring that whatever we build we are also competitive and selling it off and then the so the future is being built in a way that how I'll say is that as we move up the value chain we have a entirely new product mix we have the domestic consumption demand and we ensure that uh for both for foreign investors as well as domestic uh entrepreneurs we have the right ease of doing business and the enabling environment to build on it. So we create this platform and uh it's almost like I will represent it uh how there is a concept of a spiral in our ancient shunk that every time as you said a cycle whether it is a cycle of doom or gloom or a cycle of upside every time we will finish this cycle of volatility the answer for India has to that we have to come up at a higher level from where we started and then that's how we keep building a positive spiral.

[00:33:07]>> True, true, true. That's indeed true sir. There's no question about it. You know, thanks sir. Thanks so much uh you know for your time and very very clear understanding.

[00:33:20]I think a lot of us will benefit out of it. Uh I will keep in touch of course uh post this. I think we should do this more regularly so that we can you know keep an eye on the economy and see you know any any particular step that is taken or generally probably a monthly sort of an overview so that we can we can kind of appreciate what's happening around and what are we trying to get into because a lot of uh past the the reason I wanted to connect was the fact that the amount of attacks that have been coming across uh with a view of kind of destabilizing one can actually see that and even if we can influence three five people in not believing that I think that will be a that will be a absolutely a massive massive victory. So thank you so much sir uh for your time and of course your support and your uh you know analysis to the audience. My request is please like subscribe and let us know if anything else you want us to talk about. I will get sir back again and we can talk about it once again.

[00:34:18]Thank you sir. Thanks so much Shadik always a pleasure and keep up the fantastic good work you're doing and I think uh for your point which you made uh I think ultimately results count more than the narrative so we present results we work hard and we actually see the ground happening ultimately maybe people will need to find the new narratives and we'll uh so we'll uh address all the objection and ensure we stay on the right path. So we stay focused and we do the best we can. There are always room for improvement which is even in the current circumstances there are a lot of challenges but I think uh rather than worrying about the challenges let's find the solution and that's how we work. So thanks so much once for having me.

[00:35:08]>> Absolutely sir. Thank you so much.

[00:35:09]Namaskar Jamant.