Why Blackstone's Jon Gray believes India is close to an economic tipping point

India is nearing a point where global investors could view it in a fundamentally different light, moving beyond its traditional emerging-market status to become one of the world's largest economies and stock markets, according to Blackstone President Jon Gray.

In an exclusive interview, Gray said two decades of investment in infrastructure, tax reforms and the expansion of capital markets had laid the foundations for India's next phase of growth. He believes the country could emerge as a bigger player on the global stage, with investors increasingly treating India as a core portfolio market rather than a peripheral emerging-market bet.

Investors are looking at India as a core part of their portfolios, rather than as some sort of smaller, fringe emerging market.

JONATHAN GRAY, PRESIDENT OF BLACKSTONE GROUP

 

Infrastructure, GST and capital markets drive the shift

Gray attributed India's changing economic profile to improvements in physical infrastructure, the introduction of the Goods and Services Tax (GST) and the growing depth of its capital markets.

He cited airports and flyovers that have made travel within cities faster, alongside GST, which replaced multiple state-level indirect taxes with a more unified framework.

India's stock market has also grown to a market capitalisation of $5 trillion, Gray said. He cited Blackstone's sale of more than $1 billion worth of stock in a single company in August as evidence of the scale India's capital markets have achieved.

The changes have helped reshape perceptions of India among both financial investors and companies looking to establish a presence in the country, including through manufacturing.

Why Gray believes India's growth story has further to run

Gray's optimism is underpinned by India's relatively low per capita income, educated workforce, technological capabilities and government policies aimed at supporting economic growth.

He noted that India's GDP per capita was around $3,000, approximately one-thirtieth of the US level, leaving considerable scope for economic expansion.

Despite concerns over higher energy prices and the potential disruption of artificial intelligence (AI) to the IT services industry, India's economy grew almost 8% in the most recent quarter, Gray said. He argued that the country's growth rate sets it apart from other large economies.

Unlike more developed markets, where investors may focus on acquiring established businesses and assets, India offers opportunities to build businesses to serve rising demand.

In a more developed market, you might simply buy existing businesses or existing real estate. Here, you really have to be a builder.

JONATHAN GRAY, PRESIDENT OF BLACKSTONE GROUP

 

For the full interview, watch the accompanying video