Kotak: India Needs Manufacturing 'Steroids'

Uday Kotak, founder of Kotak Bank and spearheading USK Capital, has outlined a critical 2026 outlook for India, emphasizing the need for a "steroid-like" capital support scheme to revive the crucial middle manufacturing segment. He argues that India must move with speed and purpose in an era of shifting global hard power, embracing self-reliance.

Kotak expresses concern over the structural breakdown of the traditional banking deposit model, noting that savers are migrating to active investment. He believes banks must urgently rethink their business models to compete with fintechs and mutual funds, which have seen their assets under management grow significantly. This shift is driven by higher yields available elsewhere and a more dynamic investor base.

Addressing the rupee's volatility, Kotak clarifies that it stems from capital flows rather than macro-fundamental failures. He attributes the rupee's weakness to a slowdown in nominal GDP growth, reduced foreign investor participation due to high equity valuations, and domestic savers turning active investors. Kotak urges policymakers to avoid complacency and focus on building real businesses.