BlackRock's Ben Powell has defended India's investment appeal for foreign portfolio investors, positioning the country as a unique growth story distinct from the global artificial intelligence rally that has dominated markets worldwide.

In an interview with NDTV Profit, Powell explained why India stands out as a compelling opportunity for FPIs seeking alpha generation, despite ongoing caution toward domestic markets. He emphasized that while global markets have experienced unprecedented rallies driven by AI enthusiasm, India offers a fundamentally different value proposition.

India's Unique Growth Drivers

Powell highlighted India's distinctive combination of demographic and structural advantages that set it apart from AI-driven market narratives. The country's growth story centers on several key factors:

"India is different. It is driven by this beautiful combination of a rising working population and increasing productivity driven by the ongoing reforms, the amazing work being done around digitalization, and so forth," Powell stated.

Portfolio Diversification Benefits

The BlackRock executive positioned India as an essential component for global investors seeking diversification beyond AI-focused investments. Powell argued that India provides both geographical diversification and serves as a hedge against the AI super-boom dominating other markets.

"In a world which is very, very kind of hard to find diversification—it just feels like it's all an AI story, we're bullish that AI story—but India is a different thing," he explained. This positioning suggests India's growth trajectory operates independently of AI market dynamics, offering investors exposure to alternative growth drivers.

Strategic Investment Positioning

Powell characterized India as a "standalone good" element for global portfolios, emphasizing its value both as an individual investment opportunity and within broader portfolio context. He noted that India's differentiated growth story becomes even more attractive when considered alongside AI-focused investments.

"So India is a very different story. We think it's a good story. And to your excellent question, yes, we think it is standalone good, but even better within the context of a global portfolio because it is a slightly different thing from the AI super-boom," Powell added.

Market Outlook and Uncertainties

Looking ahead, Powell identified 2026 as a year likely filled with surprises and uncertainties. He specifically mentioned concerns about market volatility potentially driven by US President Trump's social media activity, suggesting this could create challenging conditions for investors navigating global markets.

Powell's comments come as foreign portfolio investors continue exercising caution toward Indian domestic markets, despite the country's strong fundamental growth drivers and structural reform progress.

BlackRock, the world's largest asset manager, has identified several key factors that could create favorable conditions for bond investors focused on income generation, according to the firm's deputy chief investment officer for global fixed income.

Economic Productivity and Market Conditions

The investment management giant expects the economy may benefit from an artificial intelligence-driven productivity boom. This technological advancement is anticipated to potentially have positive implications for overall economic performance, possibly creating a supportive environment for bond investments.

Concurrently, BlackRock notes that bond yields continue to remain at attractive levels for income-seeking investors. This yield environment could provide opportunities for investors looking to generate steady returns from fixed income securities.

Bond Market Dynamics

According to BlackRock's analysis, ongoing shifts in the bond market are creating new opportunities for investors to identify potential winners. These market changes may enable more selective investment approaches, allowing investors to potentially capitalize on specific segments or securities within the broader fixed income landscape.

The firm's deputy chief investment officer for global fixed income highlighted these conditions as key factors potentially supporting the outlook for bond investments targeted at income generation.

Investment Outlook

The combination of potential AI-driven economic productivity improvements, attractive yield levels, and evolving market dynamics presents what BlackRock views as a potentially compelling environment for bond investors. The firm's assessment suggests that these factors collectively could create conditions where selective bond investments may deliver favorable outcomes for income-focused portfolios.

BlackRock's deputy CIO emphasizes that the potential AI-driven productivity boom may create opportunities for income investors. The market shifts could enable selective winner identification, which may be particularly beneficial for those seeking income from bond investments.

These observations reflect BlackRock's current perspective on fixed income markets and the potential opportunities that may be available to investors seeking income generation through bond investments.