Listen closely to what officials, global business leaders and research institutions are saying and the prognosis for such stellar growth is laced with conditions, warnings and a fair dose of reality. Parse their recent public statements, ignore the customary talk of the current bout of strong gross domestic product (GDP) growth numbers, India’s potential, back-patting and all of that stuff, and it comes down to more warnings about the all-too-familiar pitfalls that the country needs to avoid if it is to continue on its current strong growth path.
Speaking at last week’s 13th SBI Banking and Economic Conclave in Mumbai, P K Mishra, principal secretary to the Prime Minister and one of India’s most powerful bureaucrats, stressed the need to improve the country’s global manufacturing competitiveness, reduce import dependence and skill its youth. On attracting foreign direct investment, an area where the country can do much better,
Mr Mishra couldn’t be more forthright: “That calls for stability of tax policy, contracts that states enter into, logistics that can be relied upon, and clearances that actually clear,” he is reported to have said. He said the central government is fully aware and engaged with these challenges. Implicit in his remarks is the distance that India still has to cover before it can count itself among the developed world.
At the same conclave, the government’s Chief Economic Adviser (CEA), V Anantha Nageswaran, echoed Mr Mishra’s concerns. Describing the Reserve Bank of India’s (RBI’s) concessional forex swap window, through which almost $144 billion was raised, as an act of “foresight” by the RBI and the government that would provide “a lot of breathing room” in the near future, he cautioned that the measure was not a lasting solution.
The CEA called for competing aggressively for global capital, and laid down the importance of sub-national (state) government policies, tax certainty and simplicity, investor protection, sanctity and continuity of contracts, and a skilled workforce. On the country’s oft-repeated demographic dividend, Mr Nageswaran said it needs to be “managed and earned” and that, for this, “we have to reimagine and be prepared to reinvent many of the ways in which we operate, whether you are in the private or the public sector”. A dose of reality — and a call for restraint on premature celebrations — from the officialdom of a country battling balance-of-payments pressures that appear far from transient amid the current strife-driven geopolitical order.
On one of his regular visits to India last week, Jamie Dimon, the chairman and chief executive officer of JPMorgan Chase, one of the world’s biggest banks, was more direct when he told The Economic Times that: “Foreign companies often have a hard time competing here because they are not allowed to. Sometimes local companies use regulations to block competition. The government shouldn’t allow that. I think that’s bad for all Indians.”
While hailing India’s latest 7.8 per cent GDP growth (for April-June 2026) and noting that the majority of investors have a very positive long-term view of India, Mr Dimon cautioned that investors “worry about inconsistent application of taxes,” and rules and called for fixing it to strengthen the country’s investment climate. Tough words from a leader who has been at the helm at JPMorgan for over two decades and has the pulse of what global businesses are thinking and doing.
In an alarming report last week, leading global brokerage firm Bernstein warned that foreign portfolio investors, who have already pulled out a net ₹2.4 trillion in 2026 so far, are unlikely to come back in hordes for good, putting the blame on India’s corporate structure. According to it, India’s big companies represent a “bygone economic era,” coupled with smaller firms’ limited “institutional investability”. The report, by its managing director Venugopal Garre and co-author analyst Nikhil Arela, says: “Most large cap companies are not investing in the future, but consolidating their past.” And what’s worse, according to the Bernstein note, these large companies often lean on government policies to continue shielding them from global competition.
On the theme of the country’s humongous tech talent and its chances of breaking into the club of global artificial intelligence (AI) leaders, Vala Afshar, chief digital evangelist of software major Salesforce had a different take. Speaking to The Economic Times in San Francisco last week, Mr Afshar said India has all the ingredients — talent, demography, data, innovation — to break into the world’s elite AI club, provided it can hold on to its engineers and founders!
He reminded the country to be mindful of the continuing brain drain of its best and brightest engineers and founders, saying that increasingly Indian software founders are basing themselves in Silicon Valley “from day one” and building their teams there amid a talent war among global technology firms like his. All very wise words spoken by people who mean well for the country. Hopefully, we will see some action on these issues by the concerned economic and political actors soon.
 "Mumbai skyline")