India Investor Conference 2026: Growth, Innovation, Consumption and Markets According to Nilesh Shah

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At the India Investor Conference 2026, Nilesh Shah, Managing Director of Kotak Mahindra Asset Management Company, shared his views on the Indian economy, market trends, innovation, entrepreneurship, consumption patterns and the challenges that could shape India's future. In conversation with Vinod Karki, Equity Strategist at ICICI Securities, he offered a candid assessment of where India stands today and what could determine its long-term success.

The discussion moved from economic growth and foreign investor flows to research and development, artificial intelligence, agriculture, consumption and entrepreneurship. Throughout the conversation, one theme remained consistent. India's future opportunities are significant, but unlocking them will require stronger innovation, better execution and greater support for entrepreneurs.

Why Markets Are Looking Ahead Instead of Celebrating Recent Economic Data

The discussion began with recent economic developments that appeared encouraging. Gross domestic product growth came in above expectations, the current account showed a surplus and the Reserve Bank of India's policy stance was viewed positively by debt markets.

Yet equity markets did not react strongly.

According to Nilesh Shah, markets are focusing less on what has already happened and more on the challenges that lie ahead. He pointed to three key concerns.

The first is the Middle East crisis. He noted that much of its impact has been absorbed by the government rather than consumers, which could affect fiscal flexibility.

The second is the monsoon outlook. With the India Meteorological Department revising its forecast, he emphasized the importance of rainfall distribution for the economy.

The third concern is deep technology, an area where India risks falling behind.

While the recent economic numbers were encouraging, markets remain focused on future uncertainties.

Earnings Growth Suggests the Economy Is Holding Up Better Than Expected

Despite concerns about growth, Shah highlighted a notable trend from corporate earnings.

While much attention was given to Nifty earnings growth of around 4%, broader market segments performed far better.

According to him, the Nifty 100 delivered earnings growth of 12%, mid-cap companies reported 36% growth and small-cap companies recorded 19% growth.

He argued that these numbers suggest economic conditions are stronger than many believe. Even though the impact of geopolitical tensions was only partially reflected during the period, earnings growth across large sections of the market indicated resilience in economic activity.

Understanding Foreign Investor Selling in India

Foreign investor selling has been one of the most discussed themes in Indian markets. Various explanations have been offered, ranging from concerns around artificial intelligence to oil dependence and taxation.

Shah suggested that there may not be a single reason.

He highlighted the possibility that high-frequency trading activity could be influencing flows. Referring to data on losses suffered by retail traders in futures and options markets and mentioning regulatory actions against certain trading firms, he raised the question of whether some of the gains made by sophisticated trading participants could be linked to foreign portfolio flows.

He also agreed with the observation that foreign investors have been reshaping their portfolios rather than exiting India entirely.

According to him, foreign investors have sold approximately 150 billion dollars worth of stocks while buying roughly 100 billion dollars worth of others. The selling and buying are taking place in different companies, reflecting changing preferences rather than a blanket withdrawal from India.

Why India Needs to Tell More Success Stories

Shah believes India has not done enough to showcase its corporate success stories to the world.

To illustrate this point, he cited the example of Prudential's investment in ICICI's asset management business in 1997. What began as a relatively small investment eventually grew into a business with a market capitalization of around ₹1.4 lakh crore.

He argued that stories like these demonstrate the value that has been created in India over the years. Greater awareness of such examples could help attract more long-term foreign capital.

The Research and Development Challenge Facing India

One of the most thought-provoking parts of the discussion focused on innovation and research.

Shah argued that investors themselves share some responsibility for India's limited focus on research and development. He observed that investors often prioritize return ratios and near-term profitability while expecting companies to invest aggressively for the future.

He suggested that this mindset needs to evolve if India wants to build stronger innovation capabilities.

According to him, the country possesses substantial technological capabilities. The challenge lies in coordination, commercialization and making research accessible to industry.

Bridging the Gap Between Research Institutions and Industry

He noted that the required technologies already exist within India across various government-funded research organizations. The problem is that these technologies are scattered across institutions, making access and coordination difficult.

He welcomed efforts to create centralized databases that map ongoing research activities. In his view, further progress will depend on making research more accessible to private companies that can commercialize it.

His broad point was that research institutions can play a powerful role when their innovations are shared and adopted widely.

Why Investors Should Focus More on Long-Term Value Creation

When asked what could encourage Indian companies to invest more aggressively in innovation, Shah pointed to the role of investors.

He argued that investors should spend more time evaluating terminal value rather than focusing only on near-term profits.

In a world increasingly influenced by artificial intelligence and rapid technological change, long-term growth assumptions can shift dramatically. Companies that invest in future capabilities may create far greater value over time, even if short-term profitability is affected.

According to Shah, investor behaviour will influence how corporate India approaches innovation. India already has entrepreneurs attempting ambitious projects in highly advanced sectors. The opportunity lies in identifying them early and supporting them.

He argued that entrepreneurs like these deserve greater recognition and backing from investors, corporations and society.

Agriculture, Productivity and the Role of Artificial Intelligence

The discussion then shifted to agriculture and income generation.

Shah pointed out that India is among the world's largest producers of milk and food grains, yet agricultural exports remain modest compared to countries such as the Netherlands.

He suggested that improving productivity requires a different mindset, one that actively seeks solutions and embraces innovation.

Artificial intelligence, in his view, can play an important role because it makes knowledge more accessible. Information that was once confined to elite institutions can now reach individuals more easily.

He believes this could help reduce knowledge gaps and improve productivity across sectors, including agriculture.

The Debate Around Freebies and Income Support

On the subject of income support schemes, Shah expressed caution.

He compared excessive dependence on freebies to addiction and argued that long-term reliance could create unintended consequences.

At the same time, he acknowledged the importance of supporting vulnerable sections of society and ensuring decent living standards.

His view was that support should be accompanied by efforts to create opportunities that enable people to become self-sufficient over time.

According to him, sustainable growth requires both assistance and opportunity creation.

India's Consumption Story Is Changing

One of the most striking observations from the session related to changing consumption patterns.

Shah compared the sales growth of Apple iPhones in India with that of Hindustan Unilever.

He noted that while Hindustan Unilever's sales grew from around ₹42,000 crore to approximately ₹65,000 crore over the period discussed, Apple iPhone sales increased from roughly ₹21,000 crore to around ₹1.4 lakh crore.

For him, this illustrates how consumption preferences are evolving.

He also referred to the rapid growth of India's concert economy, noting that spending on concerts is expected to rise significantly. These trends reflect rising discretionary spending among consumers.

The larger question, according to Shah, is how India can retain more of the value generated by such consumption within the country.

The Hidden Cost of Financial Losses

Shah also highlighted the economic impact of financial losses suffered by individuals through speculative trading, digital frauds, Ponzi schemes and cryptocurrency-related activities.

He suggested that the combined amount lost across these activities could be enormous.

In his view, preserving household savings and directing them toward productive uses could have a meaningful impact on consumption and economic growth.

The Next Big Opportunity May Be Great Entrepreneurs

Towards the end of the session, Vinod Karki asked where the next major market opportunity might emerge.

Shah responded with a note of caution. Predicting future trends is often easier in hindsight.

Instead of focusing on sectors alone, he emphasized the importance of identifying exceptional entrepreneurs.

He described business leaders who challenge industry norms, pursue difficult opportunities and execute with conviction. According to him, such entrepreneurs can create value across sectors regardless of broader market themes.

His message was straightforward. Investors who identify and support outstanding entrepreneurs are more likely to participate in long-term wealth creation.

Electrification Could Be a Major Theme for India

While reluctant to make sector-specific predictions, Shah did point to one broad direction.

He expects India to continue focusing on reducing energy dependence through electrification. This could involve greater emphasis on thermal power, solar energy, rooftop solar systems and eventually nuclear power.

He also suggested that shifts toward electric mobility, hybrid technologies, piped natural gas and other alternatives could gather momentum if supporting conditions are met.

Yet even within these trends, he returned to the same principle.

Sector tailwinds matter, but the quality of the entrepreneur remains the most important factor.

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