Bloomberg Television Sep 20, 2026
With Jon Gray, Chief Operating Officer at Blackstone · Mohandas Pai, former CFO of Infosys and a technology investor in Bangalore · Sonalde Desai, Demographer at the National Council of Applied Economic Research · Harsh Pati Singhania, Chairman and Managing Director of JK Paper · Deepa Mani, Professor at the Indian School of Business
Blackstone has produced its highest private equity returns anywhere in the world in India.
Its first attempt there did not work, and most foreign money left after the financial crisis. Blackstone stayed, replaced the team, and stopped buying minority stakes in favor of control.
"So we produced our highest returns in the world in private equity in India."
Jon Gray, Chief Operating Officer at Blackstone, on Bloomberg Television, has been investing in the country for more than 20 years and runs one of the largest foreign private equity and commercial real estate books there. He was filmed for this segment alongside four Indian executives and academics, and what they added is the constraint on the other side of his returns: the people the economy graduates and cannot yet employ.
The full segment is covered here so you can skip it.
Here are the 8 takeaways that matter.
Key Takeaways
India has been the second fastest growing stock market in dollar terms over the past two decades, by Gray's account
Blackstone's pivot was from passive stakes to control, and it produced the firm's highest private equity returns in the world
Its targets were IT services, the real estate under it, consumer businesses and domestically focused manufacturing
India has 260 million children in school and 45 million in college, and graduates 11 million a year
800,000 of those graduates are engineers, Mohandas Pai said
A college graduate's chance of getting a formal-sector job has fallen, because those jobs did not grow with the graduate numbers
Sonalde Desai ties the summer's student protests to that gap as well as to the exam system
Approvals in Telangana are capped at 30 days, and an application that misses the deadline is treated as approved
Policy is set nationally but the plant has to go in a state, so states compete on labor law and incentives
Mumbai journeys that took 90 minutes now take 20 to 25, Gray said, and the legal and capital markets plumbing improved alongside the roads
Pai's pitch for the US relationship is a division of labor: American capital and market, Indian people
1. Two Decades Of Returns
The segment opened in Delhi, where Prime Minister Modi's federal government sets the policy the rest of the country works under. Gray was asked how India has done as an investment destination, and he answered on the market rather than on his own book.
India is the second fastest growing stock market in dollar terms over two decades
I would say if you look at it over a long run here, last couple decades, I think it's done pretty well. It is the second fastest growing stock market in dollar terms over that period of time.
Jon Gray
He credited the national government, and named where Blackstone wants to put money next.
Infrastructure is Blackstone's next area in India
It's the fact that you have a government that is this supportive of growth, all this infrastructure, which is an area when we think about expanding at Blackstone in India, we've done a lot in private equity, a lot in real estate. I think infrastructure for us is the next big play. But I think that's going to facilitate their growth.
Jon Gray
2. Blackstone's Second Try
Westin's narration made the point that the path was not straight, and Gray did not soften it. The firm's early presence in India was thin and had no thesis behind it.
The first attempt had a skeleton crew and no strategy
I would say it was not a fast start. We had sort of a skeleton crew. We didn't really have a great defined strategy.
Jon Gray
The turn came after 2008, when the rest of the foreign money gave up.
The financial crisis emptied the field
And then I think what really catalyzed things was after the financial crisis, so many investors were disheartened.
Jon Gray
Gray said Blackstone's reading was that the approach had been wrong rather than the country. It hired a new team and changed the ownership model, buying majority positions or taking equal say alongside a partner.
The firm stopped taking passive stakes
We don't want to be passive anymore. We want to be able to change businesses, build businesses.
Jon Gray
Then it picked four places to put the money, and Gray gave the result.
IT services, the real estate under it, the middle class and domestic manufacturing
So let's invest in IT services and the real estate that supports it. Let's invest in companies supporting the rising middle class. Let's invest in some manufacturing businesses, particularly at that point, targeted domestically. And the results of that have been phenomenal. So we produced our highest returns in the world in private equity in India.
Jon Gray
3. 11M Graduates A Year
Mohandas Pai, who was CFO of Infosys in 1999 when it became the first Indian company to trade on a U.S. exchange, supplied the population numbers behind the middle class Blackstone is buying into.
260M children in school, 45M in college, 11M graduating a year
We have about 260 million children in school. OK? We have 45 million young people in college. We graduate 11 million every year, out of which 800,000 are engineers.
Mohandas Pai
Sonalde Desai, a demographer at the National Council of Applied Economic Research, gave the other half of it. The graduate count went up; the number of formal jobs did not.
A graduate's odds of a formal-sector job have fallen
There are many more college graduates in India today than there used to be. OK? The formal sector jobs have not expanded to the same level, so a college graduate's chances of being able to get a formal sector job has declined over time.
Sonalde Desai
4. Why Students Protested
Thousands of students went into the streets over the summer over a broken public examination system, according to the show's account. The education minister resigned and the government promised reform. Desai said the exams were the trigger rather than the whole grievance.
The exam protests are also about jobs that never arrived
While they were focused on exams and cheating in exams, some of it is also a reflection of a frustration of younger population which is unable to get jobs that they prepared for. It's not that they're always unemployed, but they're not able to get the jobs for which they invested so much.
Sonalde Desai
Desai also said there is no single Indian demographic story. The north and center still have high birth rates; the southern states grew earlier and now have fewer children per family.
Uttar Pradesh alone would be the seventh largest country in the world
Basically, the north and the central part of India, which is Uttar Pradesh, Bihar, some of the large states, Uttar Pradesh would be, I think, the seventh largest country, if it was a country, have pretty high fertility compared to the states in the south, which grew earlier. They had higher education, better status of women, and lower fertility.
Sonalde Desai
5. Competitive Federalism
Harsh Pati Singhania runs JK Paper, part of the industrial group his great-grandfather founded. He drew the line between where policy is written and where a factory actually gets built.
Delhi sets the policy; the states decide what happens
The federal government, or the center, as we call it, enunciates the major policies. But the action is really in the states.
Harsh Pati Singhania
National incentives exist for renewable energy and for the semiconductor supply chain, he said, but an incentive does not site a plant.
The plant sits in a state, so the state's labor law decides
But the plant or the location of the facility will have to be put up in a state. So the state's environment has to also be enabling and conducive to do that. So what are the labor laws there? What kind of policy support is the state providing? So this is competitive federalism.
Harsh Pati Singhania
States then specialize according to what they have. Land-poor states chase offices and people; land-rich states chase heavy industry.
States with no land sell offices, states with land sell factories
Some states which may have lesser resources in terms of land, they might focus a little bit more on the IT side of things to attract more people there. There are states which are blessed with more land area, so they will look at industry, they will look at larger industries.
Harsh Pati Singhania
6. 30 Days To An Approval
The competition between states has produced the thing foreign investors complained about for decades: faster paperwork. Deepa Mani of the Indian School of Business described Telangana's scheme. She could not remember its name on air, and the summary does not supply one, but the mechanism is specific.
A statutory approval is capped at 30 days, and silence counts as yes
So the statutory approval is capped at 30 days. If you don't, if that approval doesn't go through, you're deemed approved.
Deepa Mani
Her phrase for the paperwork the state stripped out was regulatory cholesterol, and she said the state paired the clearance with going out and courting the investment.
Removing paperwork was half of it; the other half was recruitment
So, there's a lot of regulatory cholesterol that they've removed, reduced barriers to entry in the sector. Not just through improved government efficiency, but also through consciously attracting these investments.
Deepa Mani
7. The Infrastructure Fix
Gray said he has seen real improvement in dispute resolution and in the tax rules, but that the binding problem was never only roads and airports.
What held India back was legal and capital markets plumbing as much as concrete
Well, I think the real issue that has held India back for a long time was the infrastructure in the country. And it wasn't just the physical infrastructure. It was the legal, the capital markets infrastructure.
Jon Gray
His physical example is the Mumbai flyovers, and he put a number on the journey time.
A 90-minute Mumbai trip now takes 20 to 25 minutes
If you go to the airports there today, they're quite modern. The roadways, they've created these flyovers in Mumbai so you can move north to south. Things that took an hour and a half now take 20, 25 minutes. So they've really improved that. They still have a ways to go, but a lot of progress.
Jon Gray
8. US Capital, Indian Talent
Pai's case for the American relationship is an inventory of what each side is short of.
America has the market and the money and is short of people
If you want innovation, there are 3 things that you need. You need human capital, exceptional human capital, you need financial capital and you need a market. America's got the market. It's got the financial capital. You don't have enough human capital.
Mohandas Pai
He then put the two together: Indian and American human capital, American money, American innovation and marketing, and the American market, which on his account would "conquer the entire world."
Westin set the obstacles against that — tariffs, and energy costs driven up by a war with Iran. Gray's answer was about direction rather than about this year.
The direction of travel between the two countries is closer
But I would say the path of travel, if you look at US-India relationships over time, has been getting closer. As India has more and more engaged in capitalism and growth, its desire to be closer to the West and the United States has grown.
Jon Gray
He named the friction rather than talking around it.
Tariffs, the war and energy costs are real friction
It doesn't mean there aren't friction points, tariffs, potentially the war, the impact on their energy costs.
Jon Gray
He would take the bet, and expects bumps
So I would bet that would be the case. But yes, there'll be bumps along the road, of course.
Jon Gray
Bonus Insights
The segment is framed on a Sanskrit-derived word
Westin opened on Bharat, the Hindi word for India derived from Sanskrit, and on Delhi as the place where a federal government tries to move a disparate country in one direction. The word choice sets up the whole piece, which is about how little of the action is actually federal.
Blackstone's position in India is not a small one
The show's own description puts Blackstone among the largest foreign private equity and commercial real estate investors in the country. That is the standing behind Gray's judgment on infrastructure and on dispute resolution, and it is worth holding next to his line that the firm's early years there produced nothing.
The political frame Gray declined
Asked implicitly whether a change of US administration would matter, Gray said it would not change the direction, and listed the reasons he expects common ground: the most populous country in the world, the biggest democracy, a large and fast-growing economy, and strong ties to American business.
Gray's bottom line is that India's growth case survives the tariff and energy friction because the infrastructure, legal and capital markets problems that actually held it back are being fixed, and Blackstone is moving from private equity and real estate into infrastructure on the strength of it.
Products, Companies & Tools Mentioned
Blackstone (Gray's firm; it rebuilt around control stakes after the financial crisis and says India produced its best private equity returns in the world)
Infosys (Pai was its CFO in 1999 when it became the first Indian company to trade on a U.S. stock exchange)
JK Paper (Singhania's company, part of the industrial group founded by his great-grandfather; his point is that a plant is sited by a state, not by Delhi)
Indian School of Business (Deepa Mani's institution; she described Telangana's 30-day approval clock)
National Council of Applied Economic Research (Sonalde Desai's institution; her work on fertility and formal employment underpins the jobs argument here)
Listen to the full episode
🔴 YouTube
Watch the full episode:
More Jon Gray interviews and podcast appearances
If this was worth your time, send it to someone who has to have a view on this.
Get the latest market chatter as it happens: