India as a “non-AI hedge”: Mirae Asset CEO says global money may diversify
Mirae Asset CEO Swarup Mohanty says India could benefit when AI-linked allocations peak, pushing investors to diversify into stable growth—if IT firms prove credible AI capabilities.
New Delhi — India’s market debate has shifted from chasing AI winners to asking what comes next once the AI trade cools.. Mirae Asset Mutual Fund CEO Swarup Mohanty argues that India could end up acting as a “non-AI hedge” for global portfolios when capital rotation reaches its peak in AI-related bets.
He points to a reality investors are already seeing: India’s market currently lacks a clear “pure-play” AI champion, while many large IT services firms face pressure as attention crowds into AI-linked stocks.. “The stock performance has reflected that for the most part,” Mohanty said, describing how flows have been strong into AI exposures and less patient with companies viewed as less directly tied to the AI boom.
The push, he believes, is forcing a strategic question for India’s IT sector—one that is not about abandoning core strengths, but about proving relevance.. If Indian IT companies want to avoid being sidelined in the next technology cycle, they need credible AI capabilities, not just long-standing delivery expertise.. “We have to showcase that otherwise we will be dramatically left out in that space,” he said.
At the same time, Mohanty does not expect the demand for India-style IT services to disappear.. Even if AI investments concentrate more heavily on hardware and chips—areas where countries like the US or Korea hold prominent positions—there is still work to be done around building, maintaining, and running systems that support AI-driven businesses.. His view is that IT services may be “relegated” to a lower spotlight than AI hardware, but not made irrelevant.. “I don’t think the IT world will not need what we are doing,” he said.
This is where the “non-AI hedge” idea takes shape.. Mohanty frames investment as cyclical: the last couple of years saw capital “completely washed out from the non-AI world,” as money chased the hottest theme.. But he expects fund managers to look elsewhere once AI allocations peak and the marginal returns from the AI rush start to level off.
If that rotation happens, India’s broader story could regain attention—not only for growth but for market diversity and consistency.. Mohanty cited India’s structural position, including its ability to keep growing around the 6% range, and argued that these characteristics can matter when global uncertainty rises.. In his view, India’s case becomes stronger when AI hype no longer dominates every conversation in portfolio construction.
He also offered a comparison to Korea’s market cycle: relatively muted movement for several years, followed by stronger returns later.. The point of that example is not to predict the exact timing for India, but to underline how markets sometimes spend long periods repositioning before a clearer phase of performance arrives.
From a human and practical angle, this debate is more than a fund-manager discussion.. Indian IT firms have historically been cashflow engines and a major part of the export basket, which means shifts in investor attention can quickly translate into funding expectations, hiring confidence, and spending decisions across the sector.. For workers and managers, the question is whether “AI relevance” will be measured by actual capabilities and project wins—or whether it will be judged through the narrow lens of stock-market narratives.
Mohanty’s comments also place valuations at the center of the swing factor.. While some investors believed Indian markets were overvalued in 2024, he argued that the equation changes when prices correct.. The logic is straightforward: buying good businesses at more reasonable prices can attract renewed capital even after a difficult period for sentiment.. “You buy a good stock at a good price,” he said, adding that he sees no other country growing at 6% even after the drag from shocks.
Ultimately, his argument is that India’s fundamentals—domestic consumption, policy stability, and the link between day-to-day economic life and the stock market—can give it a position in a world where other parts of the portfolio may face wider gaps.. “How quickly we fill these gaps will define our next decade forward,” he said.
For investors, the takeaway is not that AI disappears, but that AI-driven allocation cycles may eventually open room for other forms of value.. If Indian IT firms can demonstrate credible AI capability while investors rebalance toward stability and growth, “non-AI hedge” could shift from a phrase into a real portfolio theme.