India on its way to becoming an asset class, holds lot of long-term potential: Ashmore Group's Mark Coombs

Ashmore has been investing in India for longer than what Coombs can recall. It began with the intention to set up a local business. "We didn't just want to bring in global capital, which can flip from India to China, and vice versa. We said to ourselves that India is an economy which given the growth dynamic, we ought to be able to build a domestic business, where we're appealing to domestic institutions and domestic retail investors to say - hey, we can manage your Indian money for you better than you can", he explains.

Coombs looks at India as a place where not just investment happens across bonds, equities and alternatives from offshore, but we also onshore. "I see India as one of the five or six economies where Ashmore will have a big domestic business, unrelated to global business, loving it, kissing it, feeding off it, sharing flows with it", he said.

Coombs set up a context during the initial of the discussion that the reduced flow into investments across emerging markets has been due to the global conflicts that went up on since 2021-22. Because this made people, certainly the Americans, think that they're a bit concerned about being outside America.

At the same time, global investors are also "trying to pick the winner between India and China", he said.  Looking at a long term structural investing, "I want a place that doesn't have uncertainty like China in terms of structure, where capital can flow relatively freely," states Coombs with India as his preference.

But at the same time, India isn't benefitting from the lags of the Chinese market. Coombs highlights, "There was this thought process that if there are high tariffs of China, maybe India will benefit because a lot of sourcing can happen from India. But the counterpoint to that is if there are intense overcapacity in China, that will sort of flood the rest of markets, and India will actually not benefit from that".

This adds to the the relative attractiveness of India. "Economically, where there's a certainty of policy and there's some structural reform going on here. There's also digitalization and bringing more people into the net. It's a very attractive place to invest if you were doing a straight one-to-one comparison -- not just on scale, but on certainty and on terms of rules under which you can operate and invest for the long term", explained Coombs.