India at start of a major recovery, foreign investors just beginning to return, says BlackRock’s Ben Powell
Speaking to ET Now from the United Arab Emirates, Powell pointed to two seismic shifts driving his optimism: the normalisation of oil prices following the US-Iran resolution, and a broader repricing of India’s long-term growth story by global investors.
The oil tailwind is ‘only just beginning’
The reopening of Middle East shipping lanes. visible from Powell’s own window as tankers began flowing again, has pushed oil prices back to pre-war levels. For India, one of the world’s largest energy importers, this is no small development.
“The energy normalisation is very huge for India clearly and can give a tailwind which is only just beginning,” he said, adding that if current conditions hold, the outlook for significant energy importers looks “quite rosy.”
But Powell was equally clear that India’s recent underperformance had nothing to do with India itself. “India perceived not to be at the forefront of the AI trade and on the wrong side of the energy problem. I don’t think India did anything wrong, it just got caught on the wrong side of those two global big trends.”
‘Not even the first inning’ of the recovery
When asked whether the peace premium was already priced into Indian equities, Powell’s answer was unequivocal: “Not even close.”
He noted that foreign buying had only just begun in the days prior to the interview, describing the current moment as pre-first inning, using a baseball metaphor deliberately. “When we can see the foreigners come back, confidence recover, and then in the normal way higher prices will create confidence which will create more buying.”Valuations, he added, look “very inexpensive by historical standards,” making the risk-reward particularly compelling for investors willing to act before the crowd returns.
Where the flows will go: Banks, construction, self-reliance
On the question of which sectors will attract returning FII capital, Powell was direct. Banks top the list, driven by India’s domestic growth story rather than any global trend. Construction gets a mention too. But his most interesting call is thematic: the self-reliance trade.
“There is a theme that we are going to continue to see not just in India but all over the world -what the Chinese call self-reliance. This kind of need for all countries to have our own capability: be that energy, be that defence, be that technology.” Stocks aligned with the Made-in-India thesis, defence, domestic tech, energy independence, are, in his view, likely beneficiaries in an increasingly fragmented world.
US overweight holds; AI is still underestimated
On the US, BlackRock’s conviction remains intact. Powell described artificial intelligence as “a hinge moment in human history” and argued that markets are still underestimating demand for AI infrastructure — chips, data centres, and the broader ecosystem. “The earnings we are seeing driven by that AI mega force are very real and companies continue to surprise to the upside.”
He also flagged that AI is, for now, inflationary rather than disinflationary — a point he believes is becoming clearer in the data and explains why the Fed remains in wait-and-see mode under incoming leadership.
For India-focused investors, Powell’s message is straightforward: the recovery is real, it is early, and the window, before foreign capital floods back in, may not stay open for long.
