30 years ago, people were buying mutual funds and they were buying good mutual funds. They were paying very high prices, high distribution costs, and they were sort of collecting funds as opposed to having the opportunity to really understand what am I investing for, what is my outcome that I aspire to, and how do you actually build a portfolio with the right building blocks to achieve that outcome. And that's what's so exciting to us is that in many regards in India today that space is open. The combination of technology that we're able to bring through BlackRock and importantly the distribution reach and brand of Jio, bringing those two together enables us to really deliver something unique to the market here.
Rob, if I can just double down on what you said there and you talked about the headroom for growth here in India. I want to put this in the context of what you're seeing globally today for BlackRock's assets under management, what, 11 trillion at last count, perhaps even more, higher or higher. So if we are where the US and UK were 20 years ago, what do you think is imperative in terms of the way that products are designed, in terms of the way that you distribute these products to customers, and the use of technology, and how can we leverage technology to accelerate growth?
Well, a lot of the use of technology in India for so much of the consumer experience is highly, highly, highly personalized. And when you look with regard to financial services and asset management, it hasn't really caught up in the same way as so many other aspects of India has. So for example, the ability to really understand what someone's objective is. I want to retire at this age. I want to save for a wedding. Understanding that and backing into the right portfolio, automatically rebalancing that portfolio. And I think very different than many other aspects of someone's life, the real miracle of investing is that compounding of return. So if you could save 10 basis points, 0.1%, year after year after year after year with regard to expenses, and if you could generate half a percent, 1%, 2%, 3% of extra return as you aspire to that outcome, the effect could be profound. So the opportunity here in terms of bringing these methods that are really at this point quite common in other parts of the world, bringing them to India and the scale that India provides, it's so exciting to us. You know, if you look at Jio BlackRock, we launched roughly 7 months ago and we have 1 million customers. There are very few places in the world where that would even be a thing, that would even be an aspiration. So the ability to take what we've built at BlackRock for so many decades and implement it locally at the scale at the consumer level, there are very few places in the world where you could really do that like you can in India.
So a million customers in India, what's the aspiration in the next few years?
It depends on if you ask the two of us or if you ask Larry and Mukesh.
I don't see any reason why. Well, first, I think many more people in India need to enter the capital markets. I think many more people in India need to take advantage of that miracle of the compounding of returns. And there's no reason why as we look forward one year, three years, five years, there can't be many millions of Indians benefiting from the capabilities of Jio BlackRock.
Mr. Kamath, you know, you said that we need to move beyond legacy and in many ways we need to start afresh. Let me ask you that in the context of the use of technology but also designing products that are going to be relevant for the Indian market. Also the regulatory recalibration perhaps that is required to ensure that we go from the 800 billion that we currently are at and grow, you know, twice as much.
Yeah, I think break it into two parts or three parts. One is product capability. I think our partners bring that in abundance. They are the leaders in the world and they have the ability to model and design products as appropriate to any geography. So I think they have now understood this market along with the new vehicle that we have and now I think we can bring the knowledge that they have gained elsewhere to this market. So I have no doubt about that. And here it's very interesting. So you have a phase where you need to understand whether the company or customer is willing to use technology. We had that experience of plenty in the bank. The customer was willing to use technology. Every bank said the customer is not willing to take technology and that's what you saw happen from 2000 onwards. Today, I think the same thing needs to be done in the mutual fund industry. There's a particular way we expected the customer to deal with us through an agent network for example. Question today that could be asked is, is the customer willing to deal with us directly or in a hybrid way but more directly? Can we have large part of the business direct? And that's the model that has been launched and in a way the first few months were a test of this approach and it is clearly proven to be right. For example, we've not talked about it, but of a million or so customers that Rob talked about, you know, 100% have come online, about 25% are new to mutual funds. You have come online. So and I told my colleagues that I can't believe this number because if I put myself in new to mutual funds, I've not been into mutual funds and I'm going to come online and get on and buy a mutual fund, I would have said I will hesitate. But the young Indian is not hesitating.
That's Gen Z for you, sir.
Exactly. So we need to learn more. It's not... I got an anecdote to this which is even more interesting. So clearly that is proven that you are getting people online who are new to this. We need to scale this up now and imagine 10x or 50x in terms of what we have done. If it is 1 million, what is that x number? They will determine quick order. Other thing is then we tested this hypothesis of Gen Z or Gen Alpha or earlier. So I mentioned this to some people, you know, I knew who were on our common boards and so on and I just mentioned and I had a message from one of these people, very well regarded, everybody knows him so I won't name him. He says, I got on this and he didn't tell me he was getting on, in one minute I had my account going. In one minute. And he told me a story yesterday that somebody else that he mentioned to, in one and a half minutes I had my account going. So clearly I think you provide appropriate technology, India has come of age to say that I'm willing to experiment with that technology irrespective of my age. And I think that we learned during COVID because everybody had to become literate in a way to use a machine and transact financially. So that I think is an advantage that we have and it works to any service provider, financial services provider which is digital first and has low legacy.
Well, you're giving quick commerce a whole new meaning now, Mr. Kamath. You know, account openings in a minute, a minute and a half. But Rob, you know, coming back to...
Wait a minute, payment way, we open an account in 3 minutes please. You should try it later, open an account.
I most certainly will. But Rob, coming back to the use of technology and AI specifically, and we were all in Davos, and if I were to do a word cloud, if it wasn't President Trump, it was artificial intelligence and AI. The use of AI specifically, you know, you and your team are behind Aladdin. And that clearly symbolizes the magic of artificial intelligence. But what happens to human stock pickers? I mean, you know, are they going to be relevant any longer?
Absolutely. And I think what's important about investing is that part of it is art and part of it is science. And I think if you look at the different methodologies that we have within BlackRock, we have quantitative capabilities and a lot of those quantitative capabilities we were able to transport to India in terms of how we actually leverage AI to create alpha signals. But at the same time, you have human intuition. And importantly going back to this concept of stock pickers, if you think about what the traditional process has been, you have a group of people who lock themselves in a room and they read stuff. And no matter how much of a speed reader you are, there's only so much stuff you could read in a given amount of time. And now you have these capabilities that really enable the human to have access to someone who could read everything produced in the world, who could summarize everything produced in the world, who could figure out trends, themes, and actually use it to inform the human intuition, use it to inform the human stock picking. So I think there's room at least for the next decade. There's room certainly for both. And it's really the human to the power of AI more so than we have robots sort of choosing stocks for the rest of time.
So we still have a decade.
At least. I'll reassess in a decade.
You'll reassess that. But we've got about 30 seconds left. Mr. Kamath, I'm going to start by asking you. You know, you're a perennial India bull. But what makes you most specifically bullish on the India story in light of the fact that we have just presented a budget which has laid out the road map for a more medium to long-term bet on the knowledge economy, on artificial intelligence, on electronic manufacturing. What makes India most compelling today?
Yeah, very simple. Shireen, I look for patterns in everything that happened. You look for examples and patterns. So you look at transformation stories in a country context. Japan 20 years went from nothing to very powerful. We're talking about '79 onwards. China late '90s to 2015 similar story. Our story has started only four, five years back. And if you look around us we know how much is to be done. So that gives you the path as it were or the runway as it were. And that to me is at least 15 to 20 years minimum. So you have the runway and then you see all the exciting things that you mentioned just now happening. You put one on top of the other. You have a pathway for the next 20 years which is definitely going to be at least 10% year on year growth and within that we stitch our story.
Within that we stitch our story. Rob Goldstein, the final word to you. What makes India the most compelling story for you?
I've had the privilege of coming here since 2010. And when you have the opportunity to travel the world and India is part of your rotation, you could see with your own eyes the opportunity. You see the opportunity how it emerges with regard to human capital. You see the opportunity how it emerges with regard to technology here. And even importantly, you see the opportunity with regard to infrastructure and something like the coastal road and how that's changed the whole city of Mumbai. So as we look at India, the opportunity set here is striking. There are few places where you'll get off a plane anywhere in the world that will have the growth rate, that will have the knowledge base, that will have the STEM graduates, and importantly, where you will have as many people on an absolute basis, just the sheer numbers of people who are entering the middle class, who are entering that mass affluent and affluent segment, it's unparalleled anywhere in the world.
An unparalleled story. Rob Goldstein, K.V. Kamath, thank you so much for setting the stage for where India stands, but more importantly for the headroom for growth for India's financial services sector and for the mutual fund industry in specific. And thank you very much for articulating for us what Jio BlackRock's plans are for India. Appreciate your time, ladies and gentlemen. A big round of applause for K.V. Kamath, Rob Goldstein. Thank you very much.
And without further ado, may I request the chairman of Reliance Industries, Mr. Mukesh Ambani, and the chairman and CEO of BlackRock, Larry Fink, to please join us on stage. Ladies and gentlemen, a big round of applause for the two leaders who join me in a conversation on what it will take to invest in a new era. The trends that will shape our investment choices.
Hey Shireen, how are you?
Good to see you. I think they want a picture so if we can, the two of you here.
Mukesh, Larry Fink. Thank you very much and welcome to a warm, sultry Mumbai from a very cold Davos. Larry Fink, where you are in the throes of conversation with world leaders about the world order or the world disorder. So let's get started with that. We're talking about investing in a new era. What are the changes that you foresee that will shape the investment choices, the investment decisions of leaders like you as we look at this new era?
Well, first of all, it's great to be here in Mumbai. It's great to spend time with my partner Mukesh and the entire Reliance Jio team. So it's a real honor to be here. Weather is nicer here than it is in Davos and much nicer than New York where I had our board meeting last week. So it's good to be here. You know, we talk about a new era to give people a foundational understanding where we are. But as an investor, I don't look at any era. I mean, our job is to be having people focus on the real opportunities to invest over a lifetime. There's so much information that confuses people. Media talks about the moment, the velocity of money, and the reality is for most people, they need to be in a position to grow with each and everyone's country. So when you think about the growth of India, it's not a quarter, it's not a day or week, it's not a year, it's over a long horizon. And you could say maybe this is the era for India and over the next 20, 25 years. But if you use that as a foundational paradigm that we all want to think about the era of India, forget about the era of investing for a second, but the era of India, the key for us, the key for Jio BlackRock is to compel more people to understand what does that mean, the era of India, and how do you participate in it? What we've learned in the United States for that segment of the population that had invested with the growth of America, they're far better off than those who just kept all their money in a bank account. And so the key is if you believe in the era of India, forget about the era of India investment, the era of India, which I believe in, we need to get more people investing alongside the growth of the country. And that's the role of the capital markets. That's the role of what we can be doing together. And to me, whether it's, you know, you want to focus on AI, you want to focus on how we live, how we grow, how we educate ourselves, to me those are subsets of the era of India and the opportunity to be an investor alongside the growth of India. And to me, that's a compelling story. It's not about, you know, tariffs or President Trump or anything else that's top of mind. We need to be compelling people to think about the horizon of investing over a long period of time to grow with the great companies of India, to be a part of that and to participate in that. And I'm absolutely convinced if you believe in that, the era of India, we need to compel hundreds of millions of Indians to invest alongside the growth of India and that will actually transform India in so many ways because as more and more families invest alongside the growth of India, India has less needs for the importation of capital. And I do believe the combination of importation of capital from foreign investors who believe in the era of India, but the fundamental foundation of any country is having the domestic economy being built on the back of retirement savings, on the back of excess savings to invest alongside of that.
Well, thank you very much for those opening remarks. And you know, the era of India, says Larry Fink, that is certainly going to be one of the headlines that goes out this evening. But if I could ask you to explain to us what excites you the most about India. You referenced the tariffs and, you know, we've had a deal with the US overnight. President Trump and Prime Minister Modi have signed off on that reciprocal tariff agreement. So the overhang has lifted at least on one aspect of that relationship. How crucial a development is that and what excites you the most about India today?
Well, let's be clear, over 20 years it had no bearing. Maybe over the next 6 months or a year it had some significant bearing, but over time the foundational issues of India, how it's able to leapfrog. I mean, you watch what has over the last, I would say since the era of the smartphone, and I think that's a pivotal point, 2012 was, I mean think about your life before the smartphone here in India, but the beginning of the smartphone, the rollout of 5G and how that transformed India in so many ways. When you think about how the Modi administration digitized the rupee and how it transformed commerce in India across the board, I am very worried about other countries, even the United States is falling behind. We need to be digitizing. We need to be thinking about how this all plays out. I think this is part of the democratization of India and so now India is a leader in this. And so I could cite many things that give me optimism, but the fundamental opportunity is the huge intellectualism of India that transform what technology, whether the technology was created in the US or somewhere else in the world, the dispersion of that technology in India is really what is so inspiring and the utilization of the new technology for more and more people and how that transforms commerce, consumption, information, education, all of that is ripe for real solid growth. And I agree that India has over the next 10 plus years, it's going to grow anywhere from, you know, 8 to 12%, probably hovering around 8 to 10% and that's a place where I want to personally invest in. And what we need to do is compelling more Indians to invest alongside that growth.
