However, she also highlighted the role of increasing (FDI) and higher exports to help support the rupee, which is near historic lows.
“The success of the really spoke to everyone,” Tan said. “That tells you the world has faith in Indian credits. It tells you the world is happy to put their hard-earned savings in India, with the right kind of structures and incentives.”
Tan, who met finance minister Nirmala Sitharaman during the minister’s visit to Singapore on Saturday, said she remained “structurally optimistic” about India, citing its growing middle class, economic growth and digital infrastructure.
She also told finance minister Sitharaman that India had the potential to emerge as a global winner in artificial intelligence.
Indian banks mobilised $133 billion under the FCNR(B) scheme. However, foreign investors that have net sold $7.76 billion Indian equities over the past two months have put pressure on the rupee, prompting the Reserve Bank of India (RBI) to announce measures to curb volatility.
To attract more durable capital and maintain currency stability, India needs to draw more FDI and boost exports, Tan said.
“We’ve got to figure out a way to keep the rupee stable,” she said. “A lot of that is just balancing your FDI. So, it’s to persuade more FDI to go into India and, secondly, to create more exports for India.”
Singapore could play an important role in intermediating investment between north and south Asia, she added.
On artificial intelligence, Tan said India’s software talent, demographics and digital infrastructure gave it an advantage, but the country needs to build hardware and precision-engineering capabilities. “India has it to be a world winner in this age of AI because of the people and the talent,” she said.
Tan said, Asian economies have complementary capabilities that could create a powerful regional technology ecosystem, with India bringing its software strengths to the mix. For India, the next step is to develop hardware capabilities alongside its existing strengths in software and digital public infrastructure.
“You’ve got the power, you’ve got the people. You need to now combine some hardware, upstream hardware, with the downstream software.”
Tan said India’s growth, expanding middle class, consumption and digital infrastructure also needed to be better communicated to global investors.
“There are not many big countries left in the world with GDP growth of over 7%,” she said.
She said India Stack, GST and UPI have created a data ecosystem that has helped financial institutions better assess credit. Tan cited DBS’s Indian SME loan portfolio during the Covid pandemic, saying the India book performed the best because the bank had access to good data.
Describing India as “a good story,” Tan said its digital advantages were still not sufficiently understood globally.
(The reporter was in Singapore at the invitation by DBS Bank)
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