In a bold assertion about the future of investments in India, Larry Fink, CEO of BlackRock, and Mukesh Ambani, Chairman of Reliance Industries, are encouraging Indian investors to turn their attention from gold to equity markets. This comes at a time when the gold market is experiencing significant fluctuations, while Indian stocks have not been performing well recently, with the Nifty 50 index showing a decline of almost 2% this year alone.
During a recent discussion, Ambani highlighted that a substantial portion of the savings held by Indians in gold and silver is not generating any productive returns. He emphasized that investing in the stock market leads to compounding growth, which is far more beneficial. This partnership between Reliance Industries—India's largest conglomerate—and BlackRock, the globe's biggest asset management firm, has led to the creation of mutual funds tailored for the Indian market, which they launched together last year.
Their joint venture, Jio BlackRock Asset Management, introduced its inaugural equity fund in August of the previous year. By the end of December, this fund had amassed around 31.98 billion rupees (approximately $353 million) in assets under management, indicating a promising start.
Indians are known to be among the world's top consumers of gold, spending considerable amounts on it during festivals like Diwali. However, there is a notable shift towards 'financialization' of savings in the country, as evidenced by the growing appeal of mutual funds. According to Bain & Company, assets driven by retail investors in the Indian mutual fund industry are projected to soar to 300 trillion rupees (around $3.3 trillion) by 2035, a significant increase from 45 trillion rupees in the fiscal year 2025.
Despite this trend, a large part of Indian wealth still resides in gold and real estate, with nearly 59% of financial assets allocated to these physical assets in fiscal year 2025, down from 66% in fiscal year 2015, as reported by Bain.
At the event, Fink expressed his belief that the next two decades will mark an "era of India," urging citizens to invest in their nation's progression through capital markets. The International Monetary Fund forecasts that India will maintain its status as the fastest-growing economy globally, estimating a growth rate of 6.4% in 2026, whereas the global average is expected to be only 3.3%. In stark contrast, developed economies like Germany, the UK, and Japan are projected to experience growth in the low single digits.
Fink shared insights from BlackRock's experiences in the U.S., noting that individuals who invested in America’s economic growth are considerably better off compared to those who merely kept their savings in traditional bank accounts. He confidently stated, "The Indian equity market will double, triple, and even quadruple over the next 20 years," adding that he does not foresee gold achieving similar growth rates.
Even though foreign investors have been net sellers of Indian equities for over a year, increased participation from domestic investors has helped keep the markets on a positive trajectory. Data from the Association of Mutual Funds in India indicates that investments made through systematic investment plans—where investors contribute small amounts regularly—have surged, reaching 2.89 trillion rupees ($31.9 billion) in fiscal year 2025, tripling since 2021.
While the MSCI India Index recorded a modest dollar return of 2.61% over the past year, this pales in comparison to the 43.67% return seen in the MSCI Emerging Markets Index during the same period. However, looking at the longer term, the India index has delivered returns nearly double those of the broader emerging market index over the last five years.
But here's where it gets controversial: Can we really rely on equity markets for long-term wealth creation in a rapidly changing global landscape? What are your thoughts on shifting from traditional investment methods to more modern strategies? Join the conversation in the comments!
