Veteran investor Raamdeo Agrawal believes artificial intelligence is not just another technology cycle-it is the defining economic force of the coming decades. In his view, the AI buildout underway globally could eclipse even China’s manufacturing-led boom of the early 2000s, and Budget 2026 marks India’s first serious step into that supercycle.
“This AI could be bigger than China,” Agrawal said, drawing a direct parallel with the 2003-2008 period that reshaped the global economy. “That was the rise of China. Now, if you listen to NVIDIA, Satya Nadella or even Elon Musk, they are saying this is humanity’s biggest capital build-out.”
Humanity’s Biggest Capex Cycle
Agrawal framed AI not as a software story but as a massive infrastructure-led transformation.
According to Agrawal, the implications go far beyond technology companies. “So much of jobs all over-for building data centers, cables, plumbing, buildings, power,” he said, underlining that AI requires a physical ecosystem at an unprecedented scale.
For India, the significance lies in participation. “We were completely missing out. Here is the step,” he said, referring to Budget 2026’s data centre incentives. While the budget alone cannot create an AI industry, Agrawal believes it has done the crucial first task-policy alignment. “This budget has at least made us participate.”
Why AI Won’t Kill Jobs
Addressing concerns that AI could displace workers, Agrawal leaned on examples already playing out globally. Referring to medical diagnostics, he said AI now reads scans with far higher accuracy, but that has not reduced demand for professionals.
“The task is automated, not the job,” he explained. “The job of a radiologist is not to see the scan. The job is to take care of the patient.” By freeing professionals from routine tasks, AI, he argued, actually increases demand for skilled workers.
He added that fears around job losses mirror early anxieties about the internet. “Without internet there is nothing. Today India is one because of internet,” he said, noting that its impact unfolded slowly but proved transformative.
A Long-Term Bet, Not a Short-Term Trade
Agrawal cautioned against judging AI-or the budget’s AI push-through the lens of near-term market volatility. “The biggest debate is whether AI is a bubble or it’s real,” he said. His answer was unequivocal: “AI itself is real. The issue is that the investment and excitement around that could be premature.”
Drawing lessons from the internet era, he said investors tend to “overestimate the short term and underestimate the long term.” Corrections and uncertainty are inevitable, but the endgame matters more than interim noise.
Beyond AI: A Supportive Macro Backdrop
After leading with AI, Agrawal pointed to other supportive factors in the interview, including fiscal discipline and the restoration of credit growth. He described credit as “like ATF,” arguing that higher credit growth has an immediate and powerful impact on the economy.
Still, for him, AI remains the defining opportunity. “This is unfolding,” he said. “Whether we are patient enough to wait for the fruits of AI to come, or we worry about 10-20% correction-that’s the real question.”
Agrawal’s conclusion was clear: India may have arrived late to the AI race, but Budget 2026 signals intent. And if the AI supercycle plays out the way global leaders expect, the scale of opportunity could reshape India’s economic future-just as China’s rise reshaped the world two decades ago.
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