India's growth story is real, but 6.5% won't make us Viksit Bharat, warns Garima Kapoor, Elara Securities

India's growth story is durable, but dangerously comfortable. That is the central message from Garima Kapoor, Deputy Head of Research and Economist at Elara Securities, who says 6.5% real GDP growth is good enough to coast, but nowhere near enough to achieve the Viksit Bharat dream by 2047.

Kapoor said: "To achieve the aspirations we have set ourselves, we need to grow at minimum 7.5% to 8% in real terms — durably."

Kapoor was part of the panel discussion on the topic 'India's Growth Story: How Durable it is? at the ET Alpha Wealth Summit 2026 in Mumbai last week. Along with Kapoor, the panel included Dr Aurodeep Nandi of Nomura, Sakshi Gupta of HDFC Bank, and Dharmakirti Joshi of CRISIL. Deepak Ajwani, Editor, ET Digital, moderated the panel discussion.

The missing engine: Corporate capex

Kapoor breaks the economy into its three demand drivers, government, consumers, and corporates, and finds all three falling short. The government is consolidating its fiscal position. Consumer demand, while present, is policy-driven and therefore short-lived. Corporates are flush with cash but refusing to invest, preferring to chase return on equity rather than build new capacity. Without a durable private capex cycle, she argues, there are simply no new income-generation avenues to sustain consumption growth over the long term.

Two reasons for cautious optimism

Despite rating India's growth story a 6 out of 10 today, Kapoor sees it reaching 7.5 within five years if two structural tailwinds play out. First, a global reindustrialisation cycle, triggered by years of underinvestment in energy, metals, and commodities, is pushing nations to build supply chains closer to home, and India is well-positioned to capture that shift. Second, India has quietly signed over eight free trade agreements in the past year, a sharp pivot from its historically protectionist stance toward genuine export openness.

Current growth rating
6 / 10

Growth needed for Viksit Bharat
7.5–8%
New FTAs in pipeline
8+

Why FPIs are not paying India's premium

Kapoor is blunt on foreign portfolio investor outflows: India simply did not deliver earnings growth worthy of its premium valuation. With nominal GDP at 8% for most of FY25 and FY26, corporate earnings struggled to even hit 10%. A global fund manager can find better ROIC in cheaper emerging markets. Until nominal GDP recovery translates into a solid earnings rebound, India will remain a market that investors visit only for exceptional returns, not a default allocation.

The bottom line
When asked to complete the sentence — "India's growth story becomes significantly stronger if…" Kapoor gave a one-phrase answer: "We get our execution right."