Uday Kotak, founder and non-executive director of Kotak Mahindra Bank, on Tuesday said the rupee should be allowed to find its own footing.
“My personal view is we should let the rupee find its own level. And over time, the true strength of the economy will play out,” Kotak said in a panel discussion at Bloomberg New Economy Forum.
The rupee gained 1.5 per cent in the last two trading sessions after steps by the Reserve Bank of India, aimed at curbing speculative bets.
Kotak said a concentration in seven to ten stocks globally is attracting the most portfolio flows, and that this might be reassessed by investors. “India has to consider this as an important signal that we need to do a lot more to be competitive, efficient, self-reliant, and stronger in our research and innovation.”
Foreign portfolio investors (FPIs) have pulled a record Rs 3.08 trillion out of Indian equities in just nine months of calendar year 2026 – nearly double the Rs1.66 trillion withdrawn in 2025. The outflow has exerted pressure on the rupee, which has depreciated 5.7 per cent in 2026 so far. The central bank has also intervened in the foreign exchange market to curb undue volatility.
Kotak said Indian companies should enhance their partnerships with Chinese firms while Western capital turns more transactional. “If there are joint ventures between Chinese and Indian companies for manufacturing in India – the game China played with the US many years ago – that could be a path forward for India.”
Historically, Kotak said, India has tended to look to the West for investment. “But with the challenges, particularly from the United States and overall a more transactional approach to investment, the time has come for India to keep all its options open.”
Speaking at the same panel discussion, Surendra Rosha, Co-CEO, Asia & Middle East, HSBC, said that while negotiating the US-China divide in the technological stack may be harder to manage for India, the comforting reality is that the country has a history of managing different poles of power.
Waleed Al Mokarrab Al Muhairi, Deputy Group chief executive officer, Mubadala Investment Company, said a fragmented world is here to stay. “We don’t view it as a kind of short-term blip. It is the new normal, at least for the next five, ten, maybe even 15 years,” he said, adding that India’s favourable demographics, ability to adopt technology quickly and a massive infrastructure push, coupled with deep markets undergoing reforms, are enablers for the country.
(Disclosure: Entities controlled by the Kotak family have a significant holding in Business Standard Pvt. Ltd)
