‘Factory-led growth to drive India’s economy’: Ruchir Sharma says on Nikhil Kamath’s podcast; calls for structural reforms

/2 min read

ADVERTISEMENT

Speaking to Zerodha co-founder Nikhil Kamath on the podcast WTF is Finance, Sharma cautioned that AI’s promise as a transformative technology may not translate into broad-based profits.
THIS STORY FEATURES
Nikhil Kamath 40 Under 40 2025
‘Factory-led growth to drive India’s economy’: Ruchir Sharma says on Nikhil Kamath’s podcast; calls for structural reforms
India’s economic growth is unlikely to exceed 6% without deeper structural reforms, said investor, author, and economist Ruchir Sharma. Credits: YouTube | Nikhil Kamath
In this story
Profiles Mentioned in this article

India’s economic growth is unlikely to exceed 6% without deeper structural reforms, said investor, author, and economist Ruchir Sharma on Nikhil Kamath’s WTF is Finance podcast. He also added that while India has long been known for its services sector, the next wave of wealth will be factory-led. “The number of manufacturing billionaires is rising fast. If we keep opening up and stay competitive, this can be our moment,” he said. 

Commenting on regulations, he said, “India taxes far more than its income levels justify. Regulation here tends to favour incumbents, which hurts small companies and innovation.” Sharma dismissed wealth and inheritance taxes as ineffective ways to address inequality. Instead, he urged regulators to break monopolies and restrict big-ticket acquisitions. “Banning large companies from constantly buying out competitors is the best way to revive capitalism,” he said.

Foreign direct investment inflows, he noted, remain stagnant at about 1% of GDP, a sharp contrast to East Asian economies that attracted 3-4% during their high-growth phases. “We need to create an environment where global capital feels welcome,” Sharma said on the Zerodha co-founder’s podcast. 

He also called for a one-time amnesty to clean up past business violations—a measure he said could encourage entrepreneurship and improve social mobility.

Fortune India Latest Edition is Out Now!
India's Top 100 Billionaires

August 2025

As India continues to be the world’s fastest-growing major economy, Fortune India presents its special issue on the nation’s Top 100 Billionaires. Curated in partnership with Waterfield Advisors, this year’s list reflects a slight decline in the number of dollar billionaires—from 185 to 182—even as the entry threshold for the Top 100 rose to ₹24,283 crore, up from ₹22,739 crore last year. From stalwarts like Mukesh Ambani, Gautam Adani, and the Mistry family, who continue to lead the list, to major gainers such as Sunil Mittal and Kumar Mangalam Birla, the issue goes beyond the numbers to explore the resilience, ambition, and strategic foresight that define India’s wealth creators. Read their compelling stories in the latest issue of Fortune India. On stands now.

Read Now

He also added that the stock market rally in the U.S. is dangerously narrow, powered almost entirely by the hype around Artificial Intelligence (AI), while new opportunities are emerging in Europe, Latin America, and India’s manufacturing sector. 

Sharma cautioned that AI’s promise as a transformative technology may not translate into broad-based profits. “The leadership in global markets is extremely narrow. Outside AI, most U.S. stocks have barely moved,” he said, drawing parallels to the dot-com boom, where a few companies captured all the value while many others languished.

Sharma’s current investment strategy tilts towards undervalued markets in Southern and Eastern Europe—such as Spain, Greece, and Poland—as well as Latin America. “These regions have improving fundamentals and are off the radar for most global investors,” he said. According to Sharma, global markets are entering a period of transition. The AI boom in the U.S. may continue inflating valuations, but real opportunities, he insisted, lie in less obvious places. “Look beyond America. That’s where the value is,” he said.

On currencies, Sharma expects the dollar to weaken over time as more countries diversify into gold and Bitcoin. “Crypto is here to stay—less as a payment tool, and more as a store of value against dollar dominance,” he observed.

Comparing Asia’s two largest economies, Sharma praised China’s manufacturing and technology prowess but flagged rising debt and a shrinking population as long-term risks. “China fired 90 million workers in the 1990s to stay competitive. India’s democracy doesn’t allow that kind of ruthlessness,” he said, arguing that India’s welfare orientation makes radical reform politically difficult.

Fortune India is now on WhatsApp! Get the latest updates from the world of business and economy delivered straight to your phone. Subscribe now.