OPINION | India must own its capital to own its century

Domestic capital remains the missing link, even though the opportunity is now too large, strategic, and urgent to ignore.

India can no longer build a world-class economy financed mostly by someone else’s balance sheet. For a decade, global investors have captured a disproportionate share of India’s growth, especially in private markets. If India wants to own its century, it must first own its capital.

We have the resilience. We are building the institutions. But scale will not come until Indian wealth develops the confidence to underwrite Indian ambition. Domestic capital remains the missing link, even though the opportunity is now too large, strategic, and urgent to ignore.

Global Capital Dominates India's Growth

The imbalance is clear. For much of the last decade, the bulk of India’s venture and growth capital has come from overseas pools, often well over two-thirds. The largest late-stage rounds are still dominated by foreign investors. India builds world-class companies and intellectual property, but too much of the long-term value is booked abroad. We build in India but hesitate to back in India. That contradiction is no longer sustainable for a nation seeking economic leadership.

This year made the lesson unmistakable: global capital can turn off in a week. Volatile rates, tighter liquidity, and geopolitical shocks show how quickly funding windows can close. Capital is now more regional and more strategic. Countries that rely on external flows will feel the turbulence first. From January to September 2025 alone, foreign institutional investors have pulled out about ₹1.98 lakh crore from Indian equities. Those who mobilize their own savings will lead the next decade.

India is a Growing, Resilient Economy

India enters this context with exceptional strength. A $4-trillion economy growing faster than any major market, corporate balance sheets healthier than they have been in years, and a decade of reforms that have strengthened productivity, transparency, and formalization. This accumulated resilience now shows up most vividly in India’s innovation engine.

In less than ten years, India has built one of the world’s largest and most diverse startup ecosystems: more than 1.8 lakh registered ventures and over 1.7 million direct jobs. These companies operate in innovative sectors such as deep tech, electric mobility, space, materials, logistics, healthcare delivery, and enterprise software. From FY16 to FY23, startups are estimated to have contributed about 10-15% of India’s GDP growth, and their direct contribution to the economy is projected to rise to $1 trillion by 2030.

The Need for Domestic Capital

At this scale, the question shifts from whether startups contribute to India's growth to who will own the value they create. For a decade, a large share of that upside has accrued to global capital, even though the demand, talent, and policy foundations are domestic. An innovation engine of this scale is now a strategic national asset, and it deserves to be funded and owned meaningfully by India’s own savers and institutions.

And India has that capital in abundance.

India’s private wealth is deep, patient, and expanding rapidly, crossing $15 trillion and projected to grow meaningfully over the next decade. Historically, this wealth has powered home-building, stability, and financial security, which has become the bedrock of India’s rise. And we’re already seeing what domestic conviction can achieve. In 2025, Domestic Institutional Investors (DIIs) recorded their highest-ever annual inflows—nearly ₹6 lakh crore—into Indian equities, even as Foreign Portfolio Investors (FPIs) turned net sellers. Public markets have shown that when domestic capital steps forward, India becomes more stable, less vulnerable to external sentiment, and more in control of its own valuation. The opportunity now is to extend that same confidence into private markets.

Creating Pathways for Domestic Capital

Even as Alternative Investment Funds (AIFs) and other vehicles scale quickly, they still represent a young, evolving channel within India’s wider savings base. India is not short of capital; it is rich in it. The task ahead is to create pathways that allow more of this domestic conviction to participate in India’s next stage of growth.

The institutional machinery to enable this already exists. SEBI’s AIF regulations are clearer and more robust. Governance standards have strengthened. Domestic fund managers are far more institutional in underwriting and transparency. As of June 2025, GIFT City’s International Financial Services Centre (IFSC) housed more than 170 fund managers and 270+ funds and schemes, establishing India as a credible onshore-offshore platform.

Private capital for India is a way of organizing domestic wealth toward a more self-funded growth model.

Steps to Enable India's Domestic Capital Market

First, we need stable, long-term tax treatment for patient capital in regulated private-market vehicles.

Second, we need clearer, regulated channels for domestic savers to access diversified venture, growth, and infrastructure funds, so participation is simple, transparent, and well-supervised.

Third, we need a gradual opening for more domestic institutions to allocate a measured share of their portfolios into high-governance private structures, allowing long-term capital to support long-term ambition.

None of this requires new agencies or radical policy invention. It requires coherence: a national view that private markets are not peripheral but central to India’s growth architecture. Domestic capital compounds at home, strengthens local capability, and stabilizes the economy through global cycles. When aligned with national purpose, it becomes a public good.

Own the Future, or Rent It

India now faces a simple choice. Either we finance more of our own growth, or we continue exporting a share of the returns created by Indian entrepreneurs. Either Indian capital stands beside global capital, or it stands behind it. Either we own this decade, or we rent it.

India has the resilience. It has the talent. It has the ambition. What it needs now is the conviction to finance its own future. If we get this right, this century will not just happen in India; it will be owned by India.

(Rohit Bhayana, Co-CEO of Oister Global.)

Views are personal, and do not represent the stance of this publication.