India's biggest challenge in sustaining its growth story may not be a shortage of capital, but its ability to channel domestic savings into productive investments, according to Ben Powell, Chief Investment Strategist for Asia Pacific at BlackRock.
Speaking to NDTV Profit, Powell said India has the financial resources to support its long-term economic ambitions, even as foreign investors grapple with global uncertainties, elevated oil prices and the rush towards artificial intelligence-related investments.
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“We think that over the next 10 years there can be trillions of dollars of India household assets which can flow through into financial markets,” Powell said, adding that this could provide a significant funding source for Indian companies while generating returns for investors.
He described the mobilisation of domestic savings as a critical element of India's self-reliance, particularly as geopolitical tensions and energy-market disruptions expose countries to external vulnerabilities.
“India has got lots of money, lots of saving. The challenge for India is can we mobilise some of that saving into more productive assets, into funding the growth story for India,” he said.
Powell's assessment comes as Indian equities navigate pressure from high crude oil prices and shifting global investment preferences. He said international investors had been distracted by the AI-driven market rally, which has benefited economies such as South Korea and Taiwan, while tensions in the Middle East have added to the challenges facing India.
However, he maintained that these pressures did not reflect a deterioration in India's underlying investment story. BlackRock remains structurally overweight on India, he said, citing the country's scale and long-term growth potential.
Higher energy prices, meanwhile, could accelerate the need for greater domestic self-reliance, including in funding economic expansion. Powell argued that India's domestic savings pool could help reduce its dependence on foreign capital.
Beyond demographics, Powell highlighted improvements in technology, efficiency and productivity as factors that could strengthen India's economic prospects.
While international investors broadly recognise India's demographic advantage, he said they may underestimate the gains from technological adoption and improvements in the ease of doing business.
For investors, these gains matter because stronger productivity can improve returns on invested capital, making India more attractive over the long term.
Powell also pointed to the resilience of the Indian economy, noting that it had continued to deliver growth despite multiple external challenges. He said the combination of demographics and productivity improvements could support the country's next phase of expansion.
Although high crude prices remain a headwind for an oil-importing economy such as India, Powell said they should not overshadow investment opportunities across the market.
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He highlighted the importance of an active investment approach rather than treating rising oil prices as an automatic signal to reduce exposure to Indian equities. Healthy banks and their ability to extend credit to middle-class consumers could offer opportunities even amid cost-of-living pressures.
For Powell, the broader message is that India's growth story remains intact, but sustaining it will require more than attracting overseas investors. Mobilising household savings into productive financial assets could help finance businesses, deepen domestic capital markets and support the country's long-term economic ambitions.
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