Exclusive | ‘India capable of sustaining high-6% to low-7% growth,’ says Vikram Sahu, India CEO & country executive, Bank of America

What is Bank of America’s edge over peers?

A: Our differentiation lies in the breadth of our international platform and how effectively it intersects with India’s increasing importance in global boardrooms. Competing consistently across markets today requires scale and the ability to operate across local regulatory regimes, while continuing to deliver a connected global service model.

That, in turn, demands a capability set that is difficult to replicate: a full‑service platform with real scale internationally, backed by one global balance sheet and a unified approach across banking, markets, research and advisory services. Very few institutions are able to deliver this with the consistency, efficiency and scale that we can.

We bring together two distinct advantages that are difficult to replicate in combination. One is over six decades of on-the-ground presence, which gives us a deep understanding of the local ecosystem, regulatory framework and client context. The other is the breadth of our global network. Taken together, it allows us to advise with local insight while executing with global precision.

Our edge becomes most visible when clients operate across markets. Many institutions can be strong within a single geography. But only a few can seamlessly integrate liquidity, risk management, capital markets access and strategic advisory across jurisdictions. That capability is increasingly relevant as Indian companies scale internationally, and global corporations deepen their presence in India. For that reason, India remains a core priority market for us and a meaningful engine of our international growth.

This integrated perspective is also reflected in how we engage with the broader market. Our 2026 India Conference, for instance, will convene a wide spectrum of global investors, policymakers and corporate leaders. Through keynote sessions, panel discussions and curated one‑on‑one interactions with leading Indian companies, we aim to provide a deeper, more nuanced perspective on macro trends, emerging themes and India’s policy reform trajectory.

Q2. Would you be exploring any new areas of business?

A: We continue to invest in platforms, talent and governance that let clients execute faster, with adequate risk boundaries and stronger resilience.

Our expansion is selective, anchored in businesses where we are already a global leader and where India’s opportunity is structurally compounding.

You will see us lean harder into areas like cross-border transaction banking, sophisticated risk management, capital markets solutions, and sector-led advisory where India is seeing scale in manufacturing, energy transition, digital infrastructure, and financial sponsors. This is about serving the same client set more completely as their needs evolve.

Q3. Given the many headwinds, do you believe GDP growth could cross 7%?

A: India has demonstrated a remarkable responsiveness to a volatile global environment. It has pursued bilateral trade agreements with speed, recalibrated industrial policy pragmatically, and fine-tuned regulations without destabilizing markets. Few governments globally have executed this breadth of reform in such compressed time.

Obviously, there are consequences of heightened global volatility. Growth has softened from its post‑pandemic peaks. Yet at around 6.5%, India remains the fastest‑growing major economy in the world. Inflation is moderated, fiscal consolidation remains credible, and monetary policy has preserved room to maneuver. That is why India continues to be viewed as one of the most compelling large-economy growth stories.

Can growth cross 7%? It can, but it is not a right. It depends on two variables. First, the global backdrop: trade cycles, energy prices, and financial conditions. Second, domestic execution: private capex revival, real income growth, and sustained productivity gains.

My base view is that India is capable of sustaining high-6 to low-7 growth if macro stability is protected and capital formation broadens beyond public capex. The story is less about one year’s print and more about keeping the economy in a virtuous cycle.

Q4. How do you explain the private sector’s diffidence to invest?

A: In my view, there are several factors at play, but none of them reflect a lack of belief in the India opportunity.

First is the interplay of capital costs and uncertainty. In a more volatile global environment, with geopolitical signals turning less predictable, investment frameworks tighten, with greater emphasis on certainty of returns and faster capital recovery.

Second is capacity discipline. Many sectors are emerging from a phase where profitability was driven more by operational efficiency and balance sheet repair rather than fresh capacity creation. Companies typically complete that cycle before committing to large, capital‑intensive expansion.

Third is demand visibility. Headline demand indicators can appear strong, but underlying consumption remains uneven in parts. Corporates invest not just for volume growth, but when they have confidence in sustained demand and pricing resilience.

The inflection, in my view, is quite clear. Private investment accelerates when three conditions align: stable inflation, policy predictability, and clear signals on both domestic and external demand. When that happens, private capex in India tend to move in waves, not in inches.

Q5. Interest rates seem to be bottoming out; how do you think that would impact credit growth in the next few years?

A: A rate cycle that has bottomed and is beginning to move higher typically introduces a degree of discipline into credit growth rather than dampening it outright.

As rates move up, the cost of capital begins to redefine investment thresholds, especially for longer-gestation projects. This tends to moderate the pace of fresh capex at the margin, with companies becoming more selective and prioritizing returns over scale.

Borrower behaviour also becomes more calibrated. Sequencing of investments are done more carefully rather than accelerating them indiscriminately. Credit demand remains active, but it becomes more discerning in both intent and structure.

That said, India’s credit trajectory is not driven by rates alone. It is equally a function of confidence and the underlying investment cycle. If private capex strengthens alongside this rate environment, credit growth can remain robust and broad-based. If not, growth may still hold up, but it will be led more by shorter-cycle demand such as working capital and consumption, rather than long-term capacity creation.

In that sense, a rising rate environment often produces better-quality credit growth, anchored in stronger discipline and sharper capital allocation.

Q6. What conditions, do you think, need to be in place before foreign portfolio investors (FPI) believe Indian stocks are an attractive bet?

A: India’s long-term structural story remains very compelling — demographics, formalization, infrastructure creation, manufacturing, financialization and technology-led productivity are all intact. But for FPIs, the debate today is less about India’s structural promise and more about entry point, earnings delivery and relative returns.

Over the past few quarters, foreign investors have been cautious because Indian equities have traded at a premium to other emerging markets while global uncertainty, elevated crude prices, rupee volatility and geopolitical risks have weighed on risk appetite. FPIs have also seen sizeable equity outflows in 2026, reflecting this global risk-off environment and valuation sensitivity.

For sustained FPI inflows to return, four conditions are important. First, earnings growth has to broaden and improve visibility, investors need confidence that corporate India can deliver mid-teens earnings growth, not just valuation-led returns.

Second, valuations need to become more reasonable relative to growth, especially compared with other emerging markets. Third, the global backdrop must become more supportive of softer US yields, a stable dollar, lower crude prices and reduced geopolitical uncertainty would all help emerging-market allocations.

And lastly, all the emerging market flows are still going to AI trades i.e. Semis and Chips manufacturing which are predominantly in Taiwan, Korea and China. We need to see some platting of earnings and/or valuations in these geographies for investors to look at India favorably given India does not have any large credible AI play.

If these fall into place, India can again attract meaningful FPI flows because the underlying quality of the market remains very strong.

Q7. The rupee has seen a sharp depreciation over the last few months. How do you read the trajectory for the Indian currency in the near term?

A: The rupee’s recent depreciation should be seen in the context of a difficult external environment: higher crude prices, persistent FPI outflows, elevated global yields and safe-haven demand for the dollar.

The pressure has not been India specific alone; several emerging-market currencies have been affected by the same global forces. That said, India’s dependence on imported energy means crude remains a particularly important variable for the rupee.

In the near term, we should expect two-way volatility rather than a one-directional move. The RBI’s approach has typically been to smooth excessive volatility rather than defend a particular level, and that is the right framework. India still has important buffers in terms of sizeable foreign-exchange reserves, resilient services exports, remittances and a manageable external debt profile.

Thus, we expect to rupee to remain under pressure as oil continues to stay at elevated levels and global risk appetite weakens. The key to watch will be whether crude prices moderate, FPI flows stabilize and the global dollar cycle turns more benign.

Q8. Any suggestions on how India can encourage more foreign debt inflows?

A: India has made meaningful progress in opening its debt markets, and the inclusion of Indian government bonds in global bond indices is an important step in broadening the investor base. We have also seen FPIs show relatively better interest in debt compared with equities during parts of FY26, helped by more attractive yield differentials and improving market access.

In order to encourage more durable foreign debt inflows, India can focus on five areas. First, predictability of taxation and regulation is critical; global fixed-income investors value certainty as much as yield. Second, market liquidity should deepen across the yield curve, particularly in longer-tenor government securities and high-quality corporate bonds.

Third, hedging markets need to become deeper and more cost-efficient, because for many global investors the fully hedged return determines allocation. Fourth, India can further develop the corporate bond ecosystem including repo, credit default swaps, market-making and bankruptcy resolution, so that foreign investors can participate beyond sovereign debt.

Finally, continuing to align settlement, custody and disclosure standards with global best practices will make Indian debt easier to own for large institutional investors. The opportunity is significant. India offers scale, macro stability and attractive real yields. If access, liquidity and hedging improve further, foreign participation in Indian debt can become a much more stable source of capital over the next decade.

Q9. How do we view the impact of AI in the IT and banking sectors?

Embracing new technology is a credo that has been a consistent part of how Bank of America has evolved as a firm for more than two decades. We began with large‑scale automation and digitization, built trust in digital‑first interactions, and steadily embedded AI to enhance how we serve clients and enable our employees. What has changed more recently is the ability to deploy generative AI at enterprise scale, and to put that capability directly into the hands of our people across the globe.

Today, our focus is firmly on scaling AI responsibly. We have moved beyond experimentation to broad deployment, supported by strong governance, risk and control frameworks. We are applying AI across multiple layers — from general‑purpose productivity tools to function‑specific AI embedded in core systems, to more advanced, multi‑process, AI‑enabled workflows that integrate human judgment with machine intelligence.

Across the firm, generative AI is already being used to improve productivity, accelerate decision‑making and reduce friction in workflows, from markets and payments to technology and operations. Importantly, we are taking a platform‑agnostic and pragmatic approach, combining proprietary models, cloud‑based solutions and open‑source technologies, and focusing our intellectual property where it creates the most differentiation.

For both IT and banking, the impact of AI will be less about replacing people and more about augmenting expertise, improving quality and freeing capacity for higher‑value work. Success will depend not just on the technology itself, but on disciplined execution, re‑imagining workflows, upskilling our workforce, keeping humans firmly in the loop, and deploying AI in ways that are secure, explainable and aligned with our regulatory obligations.

AI is a long‑term capability that builds on how Bank of America has always approached technology, investing early, scaling thoughtfully, and using innovation to create better outcomes for clients, employees and the broader financial system.