India must boost capital markets so Indians grow with economy: Larry Fink, chief executive, BlackRock

BlackRock CEO Larry Fink urges India to prioritize domestic capital markets over foreign inflows for sustained economic participation. He highlights India's advanced financial infrastructure, from digital payments to asset tokenization, as a strong foundation for growth. Fink also downplayed AI bubble concerns, emphasizing underinvestment risks, especially in the US, amidst China's progress.

[Chairman & CEO of BlackRock Larry Fink]
ANI
Chairman & CEO of BlackRock Larry Fink

India needs to urgently focus on building deeper capital markets instead of relying on foreign inflows, Larry Fink, chairman and chief executive of BlackRock, told Sruthijith KK in an interview in Mumbai. That will allow Indians to meaningfully participate in the country's economic growth, which has the potential to expand at 6-10% over the next decade. India is at the "cutting edge of financial infrastructure" from digital payments to the future tokenisation of financial assets, said Fink, 73, who cofounded BlackRock-the world's largest asset manager- in 1988. Its assets under management hit a record $14 trillion at the end of 2025. Fink dismissed concerns of an AI bubble, arguing that demand for compute far exceeds supply. The bigger risk is underinvestment, particularly in the US, at a time when China is rapidly advancing. Edited excerpts.

The US and India just managed a diplomatic and trade breakthrough. Do you think this marks the end of a difficult phase in the relationship?

I'm really not focused on any one trade agreement, but I do believe over time, our two countries have to be closer. That doesn't mean we don't have volatility in that relationship, like every other relationship, but over a long horizon, I think the two countries need to find a pathway to which we can be growing together. We have a lot of similarities, we have a lot of differences.

Yet, I think the similarities outweigh the differences, and the opportunities we have as two countries together to build prosperity in the world are unique. This is a place where democracy thrives. There's just enormous opportunities to be working together in a fair and equitable way.

India is going to be a place that is going to have great needs for the importation of capital to fulfil the opportunities. We believe it will be a good destination for capital. So we look at this as a large opportunity.

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That being said, I think one of the most important things for India is the build-out of its own domestic capital markets. The Indian economy is one of the fastest growing in the world, and too few Indians are investing with India. Most Indians have so much money in their bank accounts, some of them are investing in maybe bonds, but you're a rentier when you do that. It's safe. You're collecting a coupon. You get your maturity, you get your payments back. But you're not growing with your economy. And when you think about the Indian economy, it has the opportunity to grow at 6-10% over the next 10 years. Why would you not want to grow with the Indian economy? And so the need to expand its capital markets, in my mind, is urgently necessary.

The trade agreement between the US and India, the trade agreement between the Eurozone and India, are just a component of my optimism for India in the future.

Larry Fink, chief executive, BlackRock

**A lot of Indian households have their savings in real estate, gold and fixed income. So your point is that to actually participate in the economy and to be investing in the economy, you need to be in equities?

Real estate is a little more localised, but you're growing with the Indian economy. But if you want to be a part of the entire growth of India, investing in the Indian equity markets over time is probably the best solution. Gold has proven to be a great international investment, and it is somewhat of a diversifier. But you're not growing with India. You're just growing with basically the fears of the world. Right now, gold has rallied dramatically because of all the fears, the debasement of currencies. So I'm not by any means suggesting gold is a bad investment. But gold has a different parameter over the long run. Gold is independent of India. In fact, when you invest in gold, you actually hurt the Indian economy, because once you invest in gold, there's no monetary effect to it. It's an asset that is unaffected to the economy. So when you invest in gold, you're actually taking money out of the economy.

**After gold's recent performance, we've all been saying that the Indian grandmother's wisdom of investing in gold has delivered better returns than all professional investment advice.

In the short run, that's true. The question is, let's say gold is at ₹5,000. Do you think gold could be at ₹10,000 or ₹15,000? I'm pretty confident that Indian equity market over the next 20 years is going to double and triple and quadruple. I don't see gold moving that way. Gold obviously moved from ₹2000 to ₹5,000, and so, at this moment of time, we can all relish what gold has done. But, you know, to me, the long-term opportunities to invest alongside the growth of India appears as a much better long-term value investment than gold at this time. But you know what... I don't want to dispel grandmother's wisdom. Can't compete with that!

Larry Fink, chief executive, BlackRock

**Foreign capital inflows into India have been anaemic recently. Is this just a function of the higher valuations Indian equities are seeing in relation to emerging markets? Do you have any recommendations about what India could do to improve these capital flows?

Well, trade agreements are a foundation probably for more inflows. You saw the rupee rally quite a bit since that. There was some fear about where India was going. The rupee devalued 12% or so over time but it's now rebounded quite considerably. Right now at BlackRock, we are looking for investment opportunities here. We're looking to invest side by side with partners. We believe there are tremendous opportunities to invest for the long run. And we have investors from Southeast Asia, from the Middle East, from Europe, who are interested in investing in India.

Historically, India has had quite a bit of currency controls. So, with the opening of the economy and with less currency controls, I believe the opportunity is for more importation of capital. We will play a role in it at Blackrock, to identify great opportunities.

But, the real question is, why can't we develop domestic capital markets quicker so foreign outflows or inflows are less impactful on the economy, less impactful on the rupee and so the key is not, can we get more foreign capital? Foreign capital, to me, is additive to the foundation of domestic capital. Economies that are so dependent on foreign inflows are weaker economies. And so the key message is—help India build a resilient liquid capital market.

**Reliance and BlackRock are both companies known for scale. Your franchise here has seen steady growth, but perhaps measured. What are your plans for the business?

We're very optimistic in our position over the long run. Our key is making sure we could give more and more Indians confidence and hope that they can invest in the global capital markets and, specifically, the Indian capital markets, in a way that will meet their long-term needs and aspirations. I believe the scale of Jio, its relationships with so many Indians worldwide, with the technology that we're building together to provide a simple, easy app to help people understand the opportunity is really something that's going to be quite important. We're very ambitious about the opportunities we have.

**The Indian mutual fund industry is mostly based on an advisory-led, indirect model. BlackRock is about technology, scale and it's about direct. So how are you going to meet this challenge?

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