BlackRock on Thursday said it is overweight on Indian equities. In its media call on mid-year outlook focusing on India’s growing prominence in global markets, Vivek Paul, Head of Portfolio Research for BlackRock Investment Institute (BII), indicated a clear strategic overweight on Indian equities, positioning India as a long-term beneficiary amid shifting macroeconomic dynamics. While BlackRock maintains a neutral stance on India in the near term due to global tactical constraints, the firm’s strategic horizon clearly favours overweight allocations, projecting India as a standout growth engine among emerging markets.
He stated that the global investment landscape is undergoing a profound transformation, driven by the erosion of long-held macroeconomic anchors in developed markets, and traditional assumptions—such as low inflation, fiscal prudence, and the reliability of safe-haven assets—are being tested, creating deep structural uncertainty. In contrast, India distinguishes itself through credible fiscal management, political continuity & stability, and a demographic edge. This conviction is not just thematic, it’s supported by structural mega forces that closely align with India’s trajectory, including digital transformation, infrastructure development (including private capex recovery), AI integration, and favourable demographics, which are now emerging as new strategic guideposts for global capital.
In 2023, Blackrock entered into a 50:50 joint venture with Jio Financial to launch services across the financial sector, including a fund house and brokerage firm.
On the contrary, inflation volatility, fiscal slippage in the US and UK, and evolving supply chain dynamics are contributing to these countries’ destabilisation. Despite near-term uncertainty and weakness, Paul believes the US dollar will retain its dominance as the backbone of the global financial system. “Structural reliance on the dollar across trade, reserves, and financial settlements is unlikely to erode quickly,” he adds. Historically too the pound’s slow decline after the second World War (WWII) suggest that such transitions unfolded over decades, not quarters. While modest depreciation is expected, the dollar’s foundational role in the global financial order is firmly intact.
Sectorally, BlackRock identifies high-conviction opportunities in Indian digital services, fintech, energy transition, and long-duration government bonds. “With low exposure to global tariffs, India could potentially bridge supply chains in a post-US-China world, enhancing its geopolitical and economic relevance,” said Paul.
In the next 6–12 months, tactically, BlackRock still favours US equities, particularly in tech and AI-aligned sectors. However, strategically, they are encouraging investors to look beyond traditional macroeconomic indicators and allocate capital to areas aligned with the mega forces reshaping economies, such as digital infrastructure and energy security. “The new reality demands a shift from static investment strategies to a dynamic approach focused on skill-based alpha and granular sector selection,” says Paul.