BlackRock, the world’s largest asset manager, with more than $14 trillion in assets under management globally, is positioned constructively on India rather than an ”outright overweight”, according to Natasha Sarkaria, EMEA investment strategy lead of wealth at the firm.
The country is one of BlackRock’s highest-conviction, medium- to long-term emerging-market trades, supported by demographics, infrastructure, financials and indirect AI-linked opportunities, she told Reuters on Wednesday.
”As long as India’s GDP grows between 6% and 7%, that’s a nice sweet spot for the economy to keep growing, keep expanding,” she said.
India’s economy grew a stronger-than-expected 7.8% in the March quarter, data showed on Friday, while the Reserve Bank of India cut its fiscal 2027 growth forecast to 6.6%-6.9% and announced measures to support the rupee amid rising oil costs and persistent foreign outflows.
”ROTATION HAS GONE TOO FAR”
However, BlackRock’s conviction comes at a difficult moment. India’s earlier ”Goldilocks” mix of benign inflation and strong growth has been disrupted by the Iran war, which has lifted oil and gas prices, pressured the rupee and raised the risk of wider supply shocks.
Not only is India the world’s third-largest oil importer, but the country’s market value has also slipped below AI-heavy Taiwan and South Korea as investors chased semiconductor and chip makers’ stocks.
The benchmarks Nifty 50 and Sensex have dropped 11% and 13%, respectively, in 2026 so far.
But neither instance makes a case for BlackRock to turn negative, with Sarkaria saying the rotation has gone too far.
”It doesn’t mean there are no derivative AI stories in India,” said Sarkaria, adding that, ”as long as there is momentum behind keeping inflation under control and enough growth to absorb a tougher oil environment, that’s okay for us.”
Industrials, materials and utilities, she said, have worked globally as investors look beyond chipmakers to beneficiaries of the AI infrastructure build-out.
SECTOR PICKS
BlackRock remains positive on financials, industrials, materials, utilities and consumer discretionary stocks.
The firm, which has a broader global preference for the finance sector, is bullish on the segment in India as well. The sector is supported by robust credit growth at domestic banks, relatively attractive valuations and potential benefits from the central bank’s recent measures.
Sarkaria did not provide a 12-month benchmark index return forecast for India, but projected low double-digit earnings growth for MSCI India this year.
Near-term volatility is likely, she said, as higher oil prices, rupee weakness and input costs feed through to corporate profits over the next two quarters.
