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Speaking at an IVCA Conclave on February 11, Nageswaran explained that long-term currency depreciation depends on inflation differential and that the current rupee weakness is due to prolonged dollar strength, not structural issues.
His remark came on a day when the rupee gained 61 paise to 86.84 against the US dollar in early trade, after nearing closer to 88-level on Monday, amid high volatility as heightened trade war fears have created widespread economic uncertainty, significantly impacting global currency markets.
The CEA noted that India has consistently delivered strong returns for direct, portfolio, and private equity (PE) investors and that the depth of capital markets provides ample investment opportunities.
Nageswaran suggested that rupee depreciation should be factored into investment decisions, but held that it hasn’t deterred returns historically. “Despite volatility, India remains a rewarding market for long-term investors. Investors should stay the course—India’s journey to Viksit Bharat 2047 will be highly rewarding,” he said.
The CEA also shed light on India’s green initiatives. He pointed out that $2.9 billion was invested in 275 impact enterprises in 2023, which is critical for achieving sustainable development goals and energy transition.
Also Read: RBI intervenes only to curb excessive volatility, says Sanjay Malhotra on rupee weakness
He stressed that the industry needs to calibrate return expectations to balance financial and social returns.
Nageswaran also explained PE exits via IPOs should be seen as a virtuous cycle, not capital flight.
Reflecting on the economy, he said, India is the only large economy consistently growing at over 6.5-7% and that it has a strong demographic advantage for the next 15-20 years. The economy has grown from $300 billion in 1993 to $3.9 trillion in 2024.
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