Lower AI Company Valuations Could Boost Indian Market Flows

RBI Governor Sanjay Malhotra told an audience that a decline in the market value of AI‑focused firms could paradoxically increase capital inflows into India. He explained that the AI investment frenzy had been a significant pull factor for global money, and a correction now may shift funds toward markets with better valuation metrics, such as India. While the dip could destabilize global markets, it is likely to benefit Indian equities and debt instruments. He listed AI valuation spikes as one of five major concerns for the worldwide financial system, together with rising global debt, leverage in the non‑bank sector, expanding private‑credit exposure, and cybersecurity vulnerabilities.