Gray says India is Blackstone's best private equity market, tipping point near

When a major private equity firm publicly backs India, it sends a sentiment signal to foreign capital, but this remains just one investor's opinion and not a hard data point on flows or valuations. The focus on control stakes in IT services, commercial real estate and domestic manufacturing indicates where foreign private equity dollars may continue flowing. Gray's warnings carry more market relevance: tariff disputes between the US and India, and higher energy costs stemming from the Iran war, which affects India as a big energy importer. Traders of the rupee and Indian equities will watch to see if this positive commentary is followed by real capital deployment.

Blackstone initially had a hard time in India, but a shift to control stakes turned it into the firm's top private equity market, and Jon Gray says a growth tipping point is approaching.

Key points:

• India has given Blackstone its highest private equity returns globally, Jon Gray said, two decades after the firm started there.
• The early India push had a small team and no clear strategy, and it was halted by the global financial crisis because the numbers did not work.
• Blackstone then moved to majority or equal-control stakes and focused on IT services, commercial real estate and domestic manufacturing.
• Gray said a country needs time to reach the point where its growth rate can expand, and India is getting closer to that tipping point.
• India's GDP is about $3.7 trillion, up almost fivefold since 2005, with the World Bank projecting 7.6% growth in fiscal 2026 and a population of 1.47 billion.
• Former Infosys CFO Mohandas Pai noted India's talent pool, while Gray warned of US-India tariff disagreements and higher energy costs from the Iran war.

Jon Gray, Blackstone's president, stated that India is now the firm's best-performing market globally, a reversal from an early effort that failed to gain momentum. His comments came in an interview with Bloomberg Television's Wall Street Week, as reported by The Economic Times, where he described India as approaching a tipping point for accelerated growth.

Gray explained that Blackstone's initial India effort had a small team and lacked a clear strategy, and it was put on hold during the global financial crisis as the figures did not add up. That failure prompted a review. The firm then adopted a strategy of taking majority or equal-control positions in companies and focused on IT services, commercial real estate and domestic manufacturing. Two decades on, India has given Blackstone its highest private equity returns of any market, Gray said.

Looking forward, Gray said it takes time for an economy to reach the stage where growth can accelerate, and India is getting closer. The report notes India's GDP at roughly $3.7 trillion, nearly five times its 2005 figure, and that the country has risen from 14th to fourth in the global economy, surpassing Germany, the UK and France. It also notes a population of 1.47 billion, the world's largest after overtaking China in 2023, and projected growth of 7.6% in fiscal 2026 from the World Bank.

Regarding skilled labor, Mohandas Pai, a former Infosys CFO, said about 11 million people graduate from Indian colleges yearly, including 800,000 to 1 million engineers or near-engineers. Of those, he estimated around 500,000 are sufficiently strong to be trained for tech. He said the US and India could pool their strengths, with India providing talent and the US providing financial capital, markets and marketing.

Gray was unambiguous that the opportunity carries risks. He highlighted US-India tariff disagreements and higher energy costs from the US war with Iran, saying there will be bumps along the road.

These comments illustrate how a large foreign investor currently characterizes India, and the move to control deals provides a concrete explanation for the return claim. The return numbers are Gray's alone and were not specified in the report. Investors will monitor whether the tariff dispute and energy costs he noted narrow the growth trajectory he describes, and whether firms such as Blackstone allocate additional capital.