Sridhar Vembu vs Nithin Kamath: FII debate reshapes India's growth path
Sridhar Vembu vs Nithin Kamath: FII debate reshapes India's growth path
Zoho's Sridhar Vembu and Zerodha's Nithin Kamath clash over India's reliance on foreign capital, spotlighting Japan's model as a potential path forward.
Two heavyweight voices in India's investment discourse clashed over the country's appetite for foreign capital. Zerodha CEO Nithin Kamath warned that foreign investor interest in India has pretty much died out, citing geopolitical risks, high valuations, a perceived lack of 'real AI plays', and rupee pressures. He noted that investors were shifting to markets such as Japan, Taiwan, and Korea.
Zoho founder Sridhar Vembu pushed back, warning against modeling India's growth on FIIs. 'FII is by nature fickle. Mostly, it promotes the 'casino' mindset. We also start dancing to FII masters. Never good,' he wrote. He argued that economic growth should not depend on financial inflows and urged a focus on building homegrown strength. 'We cannot financialize our way to prosperity.'
Vembu pointed to Japan as a blueprint: during its own economic take-off, Japan did not court FDI or FII. Instead, it licensed foreign tech, worked on mastering it, and later surpassed it. 'Study Japan,' he urged, cautioning against allowing fleeting capital to drive long-term strategy. Kamath, for his part, acknowledged global headwinds but indicated that India's rich valuations and geopolitics were pushing capital elsewhere. He argued that the absence of 'real AI plays' and currency volatility complicate the investment case, but he also noted that capital is migrating to markets seen as more receptive to risk and innovation.
