So they have no jobs right now.

I don't know whether I have a great view on it, but the way I think about it is that services will actually create way more jobs than manufacturing.

Because the manufacturing of 25, 30 years ago and the manufacturing of today is very different.

Today, you have automated robotic, even in India, there are so many of this completely zero manpower, zero man, man, completely automated robotic manufacturing.

And manufacturing was never a very large share of employment anywhere.

Like it could have been a large share of GDP as a value add, but not a very large share of employment, especially as we've become automated and technology enabled.

And that's actually even going to increase.

Plus, I still have to contend with rupee depreciation and the capital gains taxes.

So what is the implication of that?

The first implication is also that if you see of the twenty-one, twenty-five, one twenty-seven billion, I would assume about eighty to hundred billion is leverage and about twenty-five, thirty billion is actual flows by non-resident Indians.

Which also means that foreign banks or Indian offshore bank balance sheets have exposure or in banking balance called India risk of about a hundred billion dollars over and above what they had before sitting on their balance sheet.

It's not a very, very big amount, but it is sizable.

The fact that foreign banks were willing to give loans at one% spread because they are charging five to five and a half percent as leverage cost, and the bank's own cost of borrowing would have been about four% because this is a credit risk-free instrument.

It's not a Indian sovereign borrowing, but it is essentially bankrolled by the Indian sovereign in terms of the swap risk and essentially is, there's effectively very zero credit risk.

So their cost of borrowing also would have been that much lesser internally for a bank.

My question is, would they have thought through, and if so, in what way, from your experience, the whole, let's say, the downstream impact of these additional flows or this big flow that we've seen?

I spoke with Arvind Chari, chief investment strategist at Q India UK affiliate of Quantum Advisors India, and based out of London, and I began by asking him how he was seeing the action in the bond market.

The way to think about it is, A, it's a time-tested thing that India does, right? Whenever you have a issue on the currency and you need capital flows, you tap your non-resident Indians.

We've done that in '92, '98, 2003, 2013.

So this has been a thing that has always worked for India to be able to tap the non-resident Indians for, to augment the capital flows.

I would like to take it from three different perspectives because there are three different aspects of what the government and the RBI are trying to do to augment capital flows.

The first, of course, is the FCNR, Foreign Currency Non-Resident deposit flows.

In 2013, when the RBI and the government did this, we actually almost raised $26 billion back then in a very similar short period of time, so it can be sizable.

So is that because the markets will respond to actual flows and not really speculate, unlike in maybe equities, or will it take much more?

And I began by asking him how he was reading the government's call for austerity measures and how that could or if it could affect market sentiment.

You should read it as a function of imports, right? So if you look at postpone the purchase of gold, reduce your fuel consumption, reduce edible oil in cooking, you know, farmers to use organic farming or natural farming.

These are all gold, fertilizers, crude oil.

These are all aspects where we have very large import dependence.

So it's coming from that perspective that, you know, we'll have to reduce our import dependence.

And that comes from, I think, the worry that the government is seeing in the trajectory of the Indian rupee.

You've seen the Indian rupee depreciate quite a lot over the last 18 months.

So therefore, I mean, what's the current mood sitting in London where you are and from a foreign institutional investor lens, given all of this? I mean, not that it changes on a daily basis, but what's your current reading?

Is that a sign that flows are likely to come back? Or could that still be dependent on

other factors? In September, we were told that India is anti-AI.

India's underperformance was because India did not AI.

And in the last week, we have said that India is the reverse AI.

Like because AI is now into a bubble, India will actually benefit by not having AI play.

So, you know, the market sentiment will keep shifting based on themes and thematics and people keep playing that over a period of time.

What I would say is that, and I've said this in a show before, that almost 75-80% of the flows that comes into Indian equity markets are not India-dedicated flows.

Or is it that, I mean, it's lost that sort of flavor of the month phase or it's out of that flavor of the month phase right now and maybe it'll come back?

And you're also saying that we should be thinking about what a good deal would have done for us rather than the harm that a bad deal is doing to us.

When Trump became the president in November, I wrote an op-ed where I listed four points, which I thought were India's leverage or India's position.

And everybody had the view that India is relatively better off in a Trump world.

And the four were these like one, that India does not have a high trade surplus with the U.S., which China had and Mexico had.

So we were different from that.

So India has $45 billion of trade surplus with the U.S. in goods, which is manageable.

India does not have any commodity in which US wants dominance, like oil and gas, like US shale and else.

Now, is that a blip or does that reflect something else? Is it linked to tariffs and this whole tariff issue or is it linked to something else? How are you seeing this?

And I began by asking him how he was looking at or seeing things right now.

A lot of things have happened going as you realize the market is buzzing, too many things are changing.

And it looks like it is fundamental reset of some may call it global world order, some may call it global geopolitics, but I'm focusing on investments.

And I think there is a very clear reset in the way global investing happens.

And it will lead to rebalancing.

And we will see aspects of that play out.

And the reason I made that comment is Investment, as Manmohan Singh very famously said in July 1991, after his budget speech, investment is an act of faith.

How are you seeing investors? All of this doesn't mean a flood of money or a fresh flood will come into India, but what is the underlying signals, if so?

I reached out to the London-based Arvind Chari, Chief Investment Officer at QIndia UK, affiliate of Quantum Advisors India, and I began by asking him how he was seeing the current trend of FII selling into the coming months.

Just to give you a perspective to your listeners, If I look at over the last 20 years, if I look at foreign portfolio investments into public equities, in the last 20 years, we've seen about at cost as of end December, and I'll give you recent numbers as well, as of end December, at cost, the investments done by foreign investors in equities was about $200 billion, which in market value terms had increased to about $850 odd billion.

So that's the perspective, 20-year data, $200 billion at cost, $850 billion around at market value terms.

Of course, we've seen some outflows.

So since September, I think we've seen about $25 billion of outflows.

In the two months of 2025, Chan and Saeb, we've already seen about $13 or $14 billion of outflows.

So the at-cost number from $200 has kind of reduced to about just below $190.

And even at this point of time, India is more expensive than China, which people are thinking is more attractive right now.