‘Tougher world outside India’: Uday Kotak’s strong advice to Indians in Diwali message amid US tariffs, global tensions

Billionaire banker and founder of Kotak Mahindra Bank, Uday Kotak, has called for a shift in mindset among Indians, emphasising the necessity of sustainable business practices amid geopolitical uncertainties and US tariffs.

“This is a time for every Indian to be paranoid, to think about a tougher world outside India. We should get out of our comfort, convenience and complacency zone to build an India and an Indian business which is ready to take on the world,” Kotak said in a video message, while extending wishes for Diwali 2025.

“I wish the corporate India in which investors have reposed such faith will wake up to this challenge and focus on building companies sustainably for the future and improve over time, the earnings of the companies, so that the current high PE ratios get justified and for investors putting money in the equity markets,” he added.

The world has changed significantly, says Kotak

According to Kotak, geopolitical landscape, tariffs and various conflicts have created uncertainty, yet some emerging markets are starting to recover after years of stagnation.

“Geopolitics, tariffs, uncertainties, and multiple wars have clouded the horizon. Some of the other emerging markets, also, after years of underperformance, have bounced back,” Uday Kotak said.

What did Uday Kotak say about the US markets?

The Magnificent Seven have significantly boosted US market returns, though overall growth in other sectors remains sluggish, according to Kotak.

“The US markets continue to be on a roll. But in the US, it is The Magnificent Seven which have produced the bulk of the returns, and the rest of the US markets have not grown at the same speed,” he noted.

The Magnificent Seven is a group of seven large and influential U.S. tech companies, including Apple, Microsoft, Amazon, Alphabet, Meta Platforms, NVIDIA, and Tesla.

What to expect in Samvat 2082?

Ahead of Diwali, Kotak noted that the year 2081 posed challenges for equity investors, with muted returns overall. Yet, in a three-year perspective, the returns remain encouraging. Samvat 2081 has been pivotal, marked by significant global changes. Looking ahead to Samvat 2082, “we are looking forward to more clarity,” he said.

Meanwhile, he also noted that the savers-to-investors trend will continue in India for Samvat 2082.

As per Kotak, the trend will continue as significant inflows into mutual funds and equity markets are still evident. Furthermore, the current tax regime, which imposes higher tax on income and lower tax on gains, continues to support the savers to investors trend. Lastly, he mentioned that the government’s GST revamp and the zero tax up to 12 lakh have also contributed to this shift by boosting the domestic economy.

The shift from savers to investors in India has been ongoing, with the COVID-19 pandemic causing a significant structural change and rapidly speeding up this trend. In April 2020, India had 4.09 crore demat accounts, which exploded to 14.98 crore by February this year, according to a Geojit Insights report.