"Is Money Coming Only For AI?": Nirmala Sitharaman Pushes Back On India Outflow Claims

Finance Minister Nirmala Sitharaman pushed back at the claim that India lacks a real AI play and said global funds use different yardsticks when they judge emerging markets. 

Speaking at the NDTV Profit Conclave, she said India is building AI talent at speed and continues to draw serious interest from major global investors despite recent shifts in flows.

Sitharaman said concerns about India's AI positioning reflect the view of some fund managers, not all. “It is probably their own assessment, and they perhaps deal with their funds with these factors before them,” she said. She added that others see India differently. “There are equally big fund managers and people like JP Morgan whose global head comes to India and who would say probably not what they have said. They would say India is the place to be.”

On the claim that India lacks a meaningful AI play, she said the premise itself is flawed. “I am not convinced about that because AI for every country has its own little calibration over and above the AI which is globally required.” She said India's strength lies in people. 

“We have the manpower which is absolutely at a high end. We are trying to give that kind of exposure to AI even for the young fellows who come out of the college or from higher secondary.”

She argued that India is among the few countries preparing workers for every level of AI. “Probably excluding China, I am not sure if there is any country which is gearing up its manpower to be adept at AI as we are doing,” she said. She added that global employers echo this. “You hear it from people who are looking for talented people who can be at various stages of AI.”

She acknowledged that global public markets have been tilted by massive US AI spending on data centers and chips. “A lot of the flows have been in that direction,” she said, adding that this does not change India's macro fundamentals. “India has still a lot of macroeconomic factors based on which till two years ago funds would come.”

She said geopolitical considerations and concerns about “tools getting weaponized if a country asserts its sovereignty” also influence flows. Yet India continues to get calls from major funds. “Countries like Canada, their pension funds, countries like Norway, their sovereign wealth funds and so many others have been in touch with me,” she said. “Are they also not affected by the AI consideration. They should not be calling us at all.”

Her bottom line was blunt. “Different reasons prevail for different funds. The larger consideration is the return on your investment. India does give it, and that is why many of them booked their profit and went out.”