Blackstone Chairman and CEO Stephen A. Schwarzman has identified India as the investment giant's strongest performing market globally, delivering the highest rates of return among all the firm's worldwide investments. Speaking to CNBC-TV18 at the World Economic Forum in Davos, Schwarzman praised India's exceptional performance while also discussing artificial intelligence's transformative impact on the US economy.

India Leads Blackstone's Global Portfolio

Schwarzman made a definitive statement about India's position within Blackstone's global operations, declaring it the firm's number one market for investment returns.

"Our India business is our number one business in the world in terms of rates of return for the investments that we make," Schwarzman stated. He emphasized Blackstone's role as "ambassadors for India in the developed world," highlighting the firm's long-standing presence and expanding investments across multiple sectors.

Blackstone's India Commitment

The investment firm has demonstrated significant commitment to the Indian market through its operational approach and team structure. Schwarzman expressed personal enthusiasm for the market, stating "I love going to India" and praising the quality of Blackstone's local operations. The firm maintains an entirely Indian workforce for its India operations, with Schwarzman noting, "We have an amazing team of people in India. All Indians."

AI Drives Unprecedented US Growth

While celebrating India's performance, Schwarzman also addressed the remarkable economic expansion occurring in the United States, driven primarily by artificial intelligence developments. The US economy demonstrated exceptional growth in the most recent quarter.

Schwarzman described this growth rate as "highly unusual" given the United States' already elevated income levels, noting that GDP per capita of around $70,000 growing at 4%-plus "almost never happened in decades." He contrasted this with India's per capita income of approximately $3,000, explaining that higher percentage growth becomes easier from lower baseline levels.

Technology Infrastructure Boom

The artificial intelligence revolution has created substantial economic impact through infrastructure development. According to Schwarzman, nearly three-quarters of recent US growth stems from data center construction, fueled by unprecedented spending from major technology companies. This development is creating significant electricity demand, with Schwarzman predicting "a big boom in electricity" while warning of potential power shortages after two decades of stagnant electricity growth in the US.

Market Resilience Despite Geopolitical Tensions

Schwarzman observed that unresolved geopolitical tensions have not derailed markets, as artificial intelligence-driven growth continues dominating investor focus. "Most people aren't questioning the global economy," he noted, acknowledging that geopolitical issues remain "more questions than answers." Despite this uncertainty, markets have demonstrated resilience due to strong economic drivers, particularly the solid economic growth created by artificial intelligence advancement rather than speculative excess.

Blackstone has made a significant investment in India's luxury hospitality sector by acquiring a 50% stake in the Taj Aravali Udaipur hotel for $100 million. The transaction, which closed at the end of December, saw the New York-headquartered private equity giant purchase the stake from Mumbai-based realty firm Ishaan Group.

Property Details and Expansion Plans

The Taj Aravali Udaipur is currently a 180-key property operated by Indian Hotels Co. Ltd (IHCL), a Tata group company, through a management contract. The acquisition comes with ambitious expansion and upgrade plans that will transform the property's positioning in the luxury market.

According to sources, Udaipur has emerged as a premier destination for luxury tourism and high-profile weddings, making it an attractive investment opportunity. The property will be rebranded as Taj Exotica Resort & Spa Aravali, joining existing Taj Exotica properties in Maldives and Goa. The new rooms will be larger and focus more on the suite category, catering to the luxury segment.

Blackstone's Hospitality Strategy

This acquisition represents part of Blackstone's broader strategy to rebuild its hospitality portfolio in India. The company previously consolidated six hotel assets into Ventive Hospitality Ltd, a hotel development and management business created in partnership with Pune-based real estate developer Panchshil Realty. Ventive Hospitality was successfully listed on the stock exchange in December 2024.

Following this listing, Blackstone is actively pursuing new acquisition opportunities across various cities. The company is currently in talks to acquire a significant stake in Bengaluru's Ritz Carlton hotel from Nitesh Land, indicating continued expansion plans in the premium hospitality segment.

Market Growth and Investment Climate

India's hospitality sector is experiencing unprecedented growth and investor interest, particularly in the premium and luxury segments. The sector's recovery trajectory post-pandemic has demonstrated remarkable resilience and growth potential, attracting institutional investors seeking stable cash flows.

According to Gaurav Sharma, head of hotels & hospitality group at JLL India, the country's hotel industry experienced robust growth driven by surging domestic tourism, government policy reforms, and aggressive supply expansion. More than 32,500 rooms were signed by September, with 70% targeting Tier II/III cities, which boosted regional occupancy to new highs.

Industry Outlook

For the first time, hotel chains crossed the 200,000 branded room mark in 2025, with 14,000 rooms added to India's inventory in 2024. The sector's growth trajectory remains strong, with projections indicating India will add another 113,000 rooms to its inventory by 2029.

Institutional investors are increasingly allocating capital to hospitality assets, attracted by the sector's ability to generate stable cash flows and benefit from India's growing domestic and international tourism market. For Blackstone, hospitality represents a relatively new real estate investment area in India, where the company traditionally operates across commercial office, retail, logistics, and warehousing sectors.