KKR highlights that demand for higher-quality services is becoming increasingly recurring, supporting stronger and more sustainable margins across sectors such as healthcare, education, and financial services.

Despite near-term global uncertainties, leading global investment firm KKR believes the long-term investment case for India remains intact, positioning the country as a key beneficiary of emerging market consumption growth.

In a report “The Divergence Conundrum,” KKR said India is witnessing one of the world’s fastest expansions in affluent and upper-middle-income households, creating significant opportunities across consumer-facing sectors and premium products and services.

Rising incomes are driving a shift in spending patterns from basic goods toward higher-value services and experiences, including healthcare, financial services, education, travel, sports, entertainment and leisure, said KKR in its Mid-Year Global Macro Outlook report.

Increased access to credit, financial products and digital financial services has been accelerating consumption upgrades and expanding the addressable market for businesses in India, it added.

However, higher energy prices and artificial intelligence (AI) disruption in legacy IT services are tempering near-term growth, but the structural case remains intact for long-term investors, it said.

KKR highlights that demand for higher-quality services is becoming increasingly recurring, supporting stronger and more sustainable margins across sectors such as healthcare, education, and financial services.

A broadening productivity boom is extending the economic cycle, but inflation is likely to remain stickier than expected as geopolitical tensions rise and countries prioritise resilient supply chains over efficiency, it said.

KKR expects inflation to remain structurally above consensus expectations in most regions outside China as goods inflation becomes less disinflationary and geopolitical shocks become more frequent.

The report warned that the global monetary easing cycle is losing momentum. As of May-end, 10 per cent of the world’s top 30 central banks were raising interest rates, compared with 3 per cent at the end of 2025, while only 40 per cent were still cutting rate.

“The cycle is not over, but it is becoming more selective,” said Henry McVey, Head of Global Macro and Asset Allocation at KKR.

As Asia becomes increasingly self-reliant and intra-regional trade deepens, India stands to benefit from significant investment opportunities in logistics, digital infrastructure, energy transmission and supply-chain modernisation, said the report.

The report highlights the “Security of Everything” theme, which extends beyond energy, food, water and critical supply chains. Governments and corporations are increasingly prioritising resilience and security, creating opportunities in infrastructure, power and strategic assets, it said.

Latest views

The report provides KKR’s latest views on global growth, inflation, interest rates, oil markets, currencies, productivity trends, AI-driven economic transformation, and asset allocation opportunities across public and private markets.

While the global economy continues to grow, the benefits of that growth are becoming increasingly uneven across regions, sectors, and asset classes.

The report also reinforces KKR conviction in select international markets, particularly Asia, where corporate reform, AI infrastructure, and consumption upgrades remain key long-term themes.

Published on June 10, 2026