Kamal Ghorui
Kotak Mahindra Bank founder Uday Kotak said India must cut its reliance on foreign capital and build a strong domestic pool of long-term risk capital to become truly self-reliant.Speaking at an event organised by the Confederation of Indian Industry, Kotak said a “truly Aatmanirbhar” nation is one that “does not need to depend on somebody else’s money or power”, as quoted by PTI.Referring the Prime Minister Narendra Modi’s recent appeal to hold weddings in India instead of overseas, Kotak said the message carried a deeper economic meaning at a time of rising global uncertainty triggered by the West Asia conflict.According to Kotak, the world is becoming increasingly fragmented as countries prioritise their own strategic and economic interests, making it critical for India to strengthen domestic sources of capital and production. Calling it a “provocative” remark for someone from the financial sector, Kotak said, “India has financialized too early,” arguing that companies have become excessively focused on quarterly earnings, stock movements and ESOP gains rather than building businesses with a longer-term vision. “I would strongly urge companies to not be excessively focused on the short-term stock price… but think about building a company three to five years,” he said.Kotak also questioned how corporate India was deploying the benefits of lower tax rates, asking, “Are we reinvesting or running corporate treasuries?”He also pushed for deeper domestic private equity, venture capital and alternative asset ecosystems to support entrepreneurship and long-term economic growth.Kotak said pension funds and insurance companies, which manage large household savings pools, should gradually be allowed to allocate more money to private markets under a regulated framework with adequate safeguards.Warning against complacency, he said India still remains vulnerable to external shocks such as surging oil prices or reversals in foreign capital flows despite improvements in macroeconomic indicators like forex reserves and the current account deficit.“We need our balance sheet and P&L to be able to produce, or there will come a time when we will find it difficult to buy,” Kotak said, stressing the need to boost domestic production, exports and economic resilience.Kotak noted that India relied heavily on foreign portfolio investors for years, though domestic participation in capital markets has strengthened significantly since the pandemic through rising retail and mutual fund inflows. He said the growing role of mutual funds and retail investors has helped build a stronger domestic equity culture, reducing dependence on foreign capital, while stressing the need to preserve investor trust in mutual funds.
