How does Citi view the India growth opportunity?

We remain highly bullish on India and see the country as one of the most compelling long-term growth stories globally. India offers a combination of macroeconomic resilience, political stability, demographic strength and policy continuity that is rare among emerging markets. Even after quitting the consumer banking business in India three years ago, our institutional business has grown substantially. Our franchise today is larger — both in terms of balance sheet and profitability — than when we operated both retail and institutional businesses together. Our growth has been driven by a sharper focus on our core strengths, particularly institutional banking, capital markets, transaction banking and cross-border financing.

We believe India has a strong economic runway for at least the next 15-20 years, supported by a young population, rising consumption and sustained infrastructure investment. With nearly 62-63 per cent of GDP driven by consumption, the country is expected to remain one of the fastest-growing major economies globally. India has managed geopolitical and economic disruptions better than many emerging markets by diversifying energy sources and maintaining stable bilateral relationships.

How significant is India to Citi’s global business today?

India has emerged as one of the most important markets globally for Citigroup, both in terms of revenue contribution and strategic relevance. In the bank’s global revenues, which stand at a little over $80 billion, India contributes more than $2 billion. However, the comparison becomes even more significant once Citi’s global consumer banking business is excluded, since we quit the retail banking segment in India. On a like-to-like institutional business basis, India now contributes roughly 4-5 per cent of Citi’s global revenues, making it one of the bank’s top five international franchises outside North America.

What are the key themes driving India’s long-term growth?

We see multiple structural drivers supporting India’s transformation into a developed economy. The government’s Viksit Bharat vision would require India’s per capita income to rise from under $3,000 currently to over $10,000 in the coming decades. Achieving this target would require massive investments across infrastructure, manufacturing, energy transition and social sectors. Infrastructure investment is expected to span roads, ports, airports, power, logistics and urban development. We also believe climate transition and renewable energy are no longer optional for India, but an economic necessity.

India would require capital investments of $8-10 trillion over the next two decades. Domestic savings alone will not be sufficient to meet this requirement, making foreign capital critical for India’s growth ambitions. We expect foreign direct investment (FDI), portfolio flows, sovereign wealth funds, private equity, development finance institutions and institutional investors to play a major role. We see ourselves as a key intermediary in chanelling global capital into India and supporting both government and corporate financing requirements.

What opportunities do you see in mergers and acquisitions (M&A)?

We expect M&A activity in India to increase significantly over the next decade. We have been a strong proponent of allowing Indian banks to participate more actively in acquisition financing. Traditionally, the financing pool for such deals was largely limited to foreign banks, particularly Japanese and European banks. Indian banks now have stronger capital adequacy and greater lending capacity, which will help expand the acquisition financing market. We expect two broad trends to drive deal-making in India: rising demand for quality Indian assets from private equity investors and global capital; and succession-related transitions in family-owned businesses, where second or third-generation promoters may not want to continue operating businesses traditionally.

So, these dynamics would create more consolidation opportunities across sectors. As a leading M&A and equity capital markets advisor, our strategy is to originate transactions and syndicate them across multiple Indian banks, rather than relying on exclusive partnerships.

Which business segments are driving Citi India’s growth?

We have four major business verticals — large Indian corporates; financial institutions; multinational subsidiaries and cross-border corridor businesses. We remain among the top banking partners for many of India’s largest corporates, including groups such as Reliance Industries and Tata Group. Our financial institutions business covers banks, NBFCs, mutual funds, insurers, hedge funds and asset managers. However, the multinational subsidiaries business is the crown jewel of our India franchise. And the size of this business is one-and-a-half times the size of the local corporate business or the financial institutions business.

Among international corridors, the US-India corridor remains dominant, where we have nearly 60 per cent market share. Continental Europe-India business also remains strong. The fastest-growing segment, however, is Asia-to-Asia corridors, particularly Japan-India, focused on infrastructure financing; Korea-India, driven by automobiles and consumer durables; and Taiwan-India, linked to electronics and semiconductor manufacturing. The Taiwan-India corridor has accelerated significantly since the pandemic due to supply-chain diversification and semiconductor investments.