What if India's chief ministers ran their states like CEOs, competing for investment and keeping more of the gains they generated? Nikhil Kamath believes China offers a model worth examining.
Speaking at the NDTV World Summit 2026, the Zerodha co-founder pointed to a contradiction: China rejects the capitalist label, yet its local governments compete with the hunger of businesses chasing growth.
“Every municipality or the mayor of each province competes with another province like he were a capitalist organisation,” Kamath said.
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His question for India was whether its 28 states could compete similarly, with stronger incentives to build their economies.
“Maybe the chief minister of a state could operate like the CEO of the state,” he said. That could work, he suggested, if the financial upside were also allowed to remain with the state.
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The idea finds a striking illustration in Hefei, a Chinese city that placed a $500 million bet on a display manufacturer despite having no established display industry.
Writing about China's industrial rise, tech founder Robin Rivaton and Works in Progress editor Ben Southwood describe local governments behaving like investment firms: backing companies, clearing obstacles and earning returns through equity, taxes and rising land values.
“Imagine if Y Combinator owned and ran San Francisco,” they write.
In 2008, Hefei committed almost a tenth of its annual revenue to BOE Technology, then the world's ninth-largest LCD manufacturer. It supplied capital, land and utilities. BOE subsequently became the largest display-panel manufacturer, producing roughly a quarter of the world's smartphone screens, according to the authors.
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Hefei later backed electric-car maker NIO and chipmaker CXMT.
Shanghai moved with similar urgency for Tesla. Construction of its factory began in January 2019; production started that December. Kunshan went further in courting Taiwanese businesses, offering schools, familiar restaurants and Taiwanese television channels alongside inexpensive industrial land.
The competition carries costs. Cheap capital has financed excess capacity, while growth targets have encouraged inflated statistics and corruption, Rivaton and Southwood note. Chinese savers help fund the system through low deposit returns and restricted overseas investment options.
Kamath's proposal centres on the incentive: give states a stronger reason to compete and a greater share of the reward.
“I feel like we should learn from whoever has done something well,” he said.
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