JPMorgan CEO expects $25 billion inflow to India with inclusion of Indian bonds

A: I love coming here. I have been coming here since 2005. We have gone from 6,000 employees to 60,000 employees, they travel the world and they work. It's not call centers anymore- it's everything from technology to analytics to cyber. Tomorrow, I go to the New Mumbai center with 10,000 people.

Look at this conference, I remember eight years ago or nine years ago we started with 50 or 75 clients. Now it's 700 investors around the world, 100 companies presenting. I think the optimism of India is actually completely justified.

A: I think Prime Minister Modi has been doing a very good job and things like Aadhaar, to get a bank account for several thousand people, simplifying taxes, trying to open up more for foreign direct investment to the National Infrastructure Program. The universe is here, and we're not the only bank here, there are large other banks with a lot of people, but so is Accenture, McKinsey and obviously you have your local Tata, etc., so those things are driving optimism. And it's not just because of the complications with China, I think that's an opportunity but some of this optimism would have been there anyway.

A: It's excellent. I remember coming here years ago and having told our people, you better study what they are doing in India because they're ahead of us in a bunch of things. But I can't answer the question because I'm about to meet with some of them right after this. So a great reason to travel- you learn a lot. But they have built some great companies here.

A: I think it should be more of the same. If you go to the investment banking side of our business, we used to cover 10 or 20 companies here, and we did research on them. Now we cover 150 plus, we used to bank 20 or 30, multinationals coming to India. Now we bank 500 multinationals and also we bank all your Indian companies in London, Singapore, and America, as we help them finance or buy and do M&A. So my guess is next 20 years, they'll just double again,

A: So our folks think the inflow will be at $25 billion. It has to be bought, so it gets bought over time. But I think it's a wonderful thing with an index like that, what it means is your capital markets, your rule of law, your transparency, your government financing, the indirect effect is more important.

What you want is capital, foreign direct investment, both in plant and equities, and innovative companies and stuff like that. So it's just one more very positive sign.

A: Far more important to me is the Ukraine, war, oil, gas, food, and migration, it's affecting all global relationships, very importantly, the one between America and China. I think America takes this very seriously, I'm not quite sure how the rest of the world does. You have a European democratic nation invaded under the threat of nuclear blackmail. I think it has been a good response, but it's going to affect all of our relationships until somehow the war is resolved.

India is going its own way. They've made their priorities quite clear about national security and what that means.

I'm an American patriot, so governments are going to set foreign policy, not JP Morgan, but I think Americans should stop thinking that China is a 10-foot giant. Our GDP per person is $80,000, theirs is $15,000, we have all the food, water, and energy we need and we have the unbelievable benefits of free enterprise and freedom. And they have their own issues, I'm not making fun of them but they've got their own issues about demographics and energy and climate, etc. I like the fact that the Americans are engaged with them now- Tony Blinken, Janet Yellen, and Jake Sullivan. There are legitimate issues around national security and unfair trade, I hope they resolve them. We don't have to be hostile about it, there are going to be changes, and it is definitely not over yet.

A: More engagement and I understand it's going to cause a little bit unravelling. I think it'll just be a change of flows over time about certain trade and investment types of things.

But it's not just America, every country is relooking at its net. What is national security? Do I have reliant energy lines? Do I need semiconductors from China? Where do I get my rare earths from? Ukraine woke everyone up to that and that's a permanent state of affairs now.

A: I think it's just going to change it. People say decoupling but there is still globalisation, companies and nations are going to be making determinations that change those flows and that creates huge opportunities for India in services and certain manufacturing, and equates risks. So I'm hoping that political leaders sit down, have these conversations and make these changes in a way that's not completely disruptive, but is dwarfed by the risk of war and nuclear proliferation, things like that. So I think we have to be very cautious about it. But it's an opportunity for India, and hopefully, you're going to seize it.

I also think, by the way, it's affecting global relationships, India and America are natural partners. Between Russia and China, you have to be kind of non-aligned, but we are your best friend. I mean, anyone who doesn't think that through hasn't thought really carefully?

A: I'm thrilled that they're having those conversations. I think we got to do a better job on the trade and investment side, not just the labour and climate side.

A: That we should sit down with India and negotiate better trade and investment relationships, to open up more markets to both sides. India can let some more competition in here and we can bring in more capital and both of it. You like us a lot, but what about trade?

A: I agree with Larry, but he also is quite concerned about it. So if you have higher for longer, we have got good growth, and inflation is kind of contained that is good, you have more fighting for capital and paid up for capital and the world needs it. It needs it for remilitarisation, the green economy, the Inflation Reduction Act (IRA), the Chips Act, and huge deficit spending, but we need growth. If you actually have stagflation, that's not so good. I will just say, right now it feels good that fiscal stimulation was extraordinary, the monetarism was extraordinary, that was a global phenomenon more in the United States than elsewhere. But that's a little bit of a sugar high. And that little bit is going to go away and we are hoping we have a soft landing, but all these other things are there- Ukraine, oil, gas, winter, disruption of trade flows. So I think good leadership on the part of America, India, China, and Europe, can make sure the negative don't happen. But I am putting myself in a quite cautious category.

A: I think we have to not get confused around various goals. Unbelievable debt financing and high levels of debt around the world we don't know the effect of that. And these deficits, other than war probably are as high as they have ever been. Like I said, with the highest debt level ratio I put down that on the sugar high category. And government spending is inflationary. Governments can't just simply spend more and more money because that’s inflationary. But I don't know the effects of that, like I said, we have higher rates and a slowdown, but inflation coming down and good growth.

A: I think it's more likely to not, but again, I think people should be prepared for higher oil and gas prices, higher rates, as a matter of just being prepared. You and I can guess what it's going to be, you don't know, I don't know, no one knows. But I think the odds are higher than that, but hopefully, we will get through. I think the geopolitical situation is the thing that most concerns me. And we don't know the effect of that on the economy.

But again, I think that the humanitarian part is far more important. I think it's also very important for the future of the free democratic world. We may be at an inflection point for the free democratic world. That's how seriously I take it.

A: Absolutely, we have dealt with inflation before, we dealt with deficits before, we have dealt with recessions before, and we haven’t really seen something like this pretty much since World War II.

A: There is no playbook.

A: I don't know. One of the things I think should take place is, what the regulators want. Do they want the mortgage business inside banks or outside? Do they want credit outside of banks or inside? Do they want diversification or no diversification? So like, some of these rules are anti-diversification- operating risk capital, Global Systemically Important Financial Institutions (G-SIFIs), do you want American banks to have the same requirements as international banks, because right now, it's 30 percent more? And there should be a cost-benefit analysis, transparency, and what we are trying to accomplish. And I wish that work was done beforehand. They are going to do what they want to do, JP Morgan can’t affect that, everyone is going to put in their comments and hopefully, we end up in a good place.

A: We have 1,000 people involved in it. AI is as real as they say. We have 300 use cases around marketing and fraud risks when we move $10 trillion a day going through AI systems. In every application, every job, every person will be affected. And remember, bad guys can use it too. So we have to like to be ahead of the bad guys in terms of voice recognition, how they use data, and even for cyber. So it's going to be great for mankind, there may be some disruption. I think governments should be prepared to deal with the disruption, but they can't stop AI. So probably a very big plus for mankind, but I completely understand people's concerns about the bad side of it.