Artificial intelligence is not here to kill information technology, but to redefine how the industry operates, according to market veteran Vikas Khemani.
"IT isn't dying because of AI. The key question is how do you deliver IT services now?" the founder of Carnelian Asset Management & Advisors Pvt. told NDTV Profit in a conversation.
While large-cap IT firms may find it tough to pivot, he sees immense growth in smaller, more agile companies. And even if businesses want to adopt AI, the transition will not happen in a vacuum. "Somebody from the IT sector has to implement it," he pointed out, making a case for why technology services would remain crucial, just in a different form.
Technology doesn't kill jobs, it creates more.Vikas Khemani
Drawing parallels with past technological disruptions, Khemani recalled the late 1990s dematerialisation era when stockbrokers feared mass job losses due to automation.
"There was a strike at the BSE because people thought they'd lose their jobs," he said. But instead of shrinking, the industry expanded, creating even more employment.
"Technology makes life easier—you have to adapt to it," he emphasised, reinforcing the idea that AI, like any other innovation, was an enabler rather than a threat.
(Vikas Khemani. Photo: NDTV Profit)
(Vikas Khemani. Photo: NDTV Profit)
India's Trade Policies
Khemani also weighed in on India's evolving economic policies, particularly the government's clear intent to boost manufacturing. Unlike China, Japan and South Korea, which historically relied on tariff barriers, India has only recently started using them, he said.
"As long as the government's intent is clear, we're okay," Khemani said, describing the current administration as "very sensible in terms of taking care of local issues".
Khemani's comments come in the wake of a recent potential bilateral trade agreement between India and the US, which made its way to the joint statement issued following Prime Minister Narendra Modi's meeting with President Donald Trump in February. As part of the agreement, the two nations have agreed to boost trade to $500 billion by 2030.
Trump, in a recent spew of tariffs and related threats, had imposed measures on steel and aluminum. India is currently weighing the prospect of reciprocal tariffs, and reviewing safeguard measures to protect its steel industry from a surge in cheap imports.
India is also expected to sign a free trade agreement with New Zealand, according to recent reports. The two countries are also aiming to grow bilateral trade 10 times from the current level, as per Commerce Minister Piyush Goyal.
Adapting To Market Corrections
With markets experiencing a downturn, Khemani offered a simple yet powerful piece of advice: focus on your mental game. "If you made a bad decision, correct it. But if you made a good decision, stay put," he said. For him, real success in investing comes from the ability to ride through volatility.
The comments came amid a correction in Indian equity benchmarks, with the Sensex and Nifty currently trading over 12% below their record highs reached in September 2024.
The downturn is primarily attributed to uncertainties surrounding the escalating tariff wars, which intensified after Donald Trump began his second term as the US president. Additionally, prolonged selling by foreign investors and disappointing quarterly earnings have contributed to the market's decline.
Yet, the 50-stock index remains expensive. The benchmark has a price-to-earnings multiple of more than 21, the highest among its Asian peers and the second highest among global, Bloomberg data showed.
Watch the full conversation here:
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