India’s AI firms not yet ready for stock market listings, says Piyush Goyal

• India’s AI sector lacks scale for stock listings.
• US tech appeal slows foreign portfolio inflows to India.
• India and US trade deal is in the legal fine-tuning stage.

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Commerce and Industry Minister Piyush Goyal said on Friday that India’s artificial intelligence sector had yet to reach a scale that would support stock market listings, attributing the slowdown in foreign portfolio inflows to the appeal of technology stocks in developed markets.

“The levels at which we have reached in our AI story are still not significant enough for the listing of our AI companies,” Goyal said at a media event. He noted that nine of the 10 largest companies in the United States were technology firms and that the rest of the market, taken together, was in negative territory. Strong gains in South Korea, Taiwan and Japan were also driven by technology stocks, he said.

The outflows from India stemmed largely from investors’ preference for these markets, Goyal said. With the interest-rate differential between US and Indian bonds also considerably narrower, “it is only natural that we will see some slowing down of flows”, he added.

On foreign direct investment (FDI), Goyal said investors had probably been waiting for the rupee to stabilise. The currency has traded between 94 and 96 against the dollar for four to five months, and he expected free trade agreements (FTAs) to attract larger investments into manufacturing by giving suppliers greater certainty. So far, most inflows have gone into services and banking, he said.

Gross FDI has grown consistently over the past 12 years, apart from a minor dip about three years ago, Goyal said. He welcomed the decline in net FDI figures, citing Inox’s purchase of the largest solar manufacturing company in the United States and plans for India’s first steel plant in the US in 66 years as evidence that “India is going global”.

Trade talks

Goyal also addressed trade negotiations with Washington, saying India and the United States had concluded their broad understanding and were now working on the legal details to ensure Indian exporters received the competitive advantage agreed upon in February.

“We have concluded the deal. We have nothing more to add, to give or take. The fine print is being worked upon,” he said. The central question, he added, was how the US would deliver that advantage, a task requiring legal expertise that “AI cannot give”.

His comments followed Finance Minister Nirmala Sitharaman‘s remarks on October 5 at the Munich Leaders Meeting, where she said both sides appeared to have reached a plateau beyond which further concessions would be difficult. Her remarks prompted questions about whether the negotiations had stalled.

Goyal said the interpretation had focused on the headline rather than the substance. Hard bargaining was inevitable, he said, adding that describing the talks as having plateaued did not mean they had stopped.