“Do not bet against India,” he warns. “That’s my learning of last 40 years,” the seasoned Dalal Street investor told Motilal Oswal AMC‘s First Global Partner Summit.

The 30-share Indian equity benchmark has risen 100 times in last three decades. And Agrawal is betting on an encore in the coming decades.

“India has been a wealth-creating machine in the past, and will remain so in the future,” he said, adding that most indicators suggest India could be the next China.

“When I started my career, Sensex was at 300-350-old levels. Today, it is at 35,000. Neither did I have courage or imagination to think of such levels. It happened right in front of me, and this experience does not allow me to go bearish on India at any point,” said the Co-Founder & Non-Executive Chairman of the Motilal Oswal Group.

He admits predicting the market is fraught with danger. “But since the stock market buys the future, the vision to see, the courage to buy and the patience to hold stocks are the key to success,” he said.

He also said the only way to envision the future is through the prism of the past.

Agrawal then went on to back up his bullish argument. “India’s nominal GDP growth in dollar terms rose 8 per cent CAGR over last 35 years against the global average of 6 per cent. China was an exception with 10 per cent growth,” he pointed out.

At present, India’s GDP is just $2.9 trillion out of the world’s $86.6 trillion. China’s GDP stands at $14.3 trillion.

“Even if the world economy grows at 5 per cent over next 15 years, it will be valued at $160-170 trillion. If the Indian economy maintains at least 200 basis points outperformance over the world, as was the case in the last 35 years, it will make a huge difference,” Agrawal said.

Calling India the ultimate trillion dollar opportunity, Agrawal said: “It took 60 years for India to become $1 trillion economy, but just 7-8 years to add another trillion. The economy will take less number of years to add the next $1 trillion to GDP,” he said.

“India today is where China was in 2006. Between 2006 and 2019, China’s GDP growth was robust at 13 per cent CAGR,” he said.

India, he said, is the largest democracy, which has rules of law and a well-established structure, which will work to its advantage. “The biggest thing happening in India is the move toward a one-nation idea — be it one income-tax, one GST, one aadhaar, one ration card or one unified market,” he said.

India’s demography also favours itself — 40 per cent of India’s population is under 20, 85 per cent below 50.

Agrawal said one out of four households today constitute middle or high income groups. In the next decade, every two of four households will be in the higher income groups, he said.

A doubling of GDP per capita would imply a 10-times jump in consumer discretionary spend, he said. “In the pyramid, India is a motorcycle economy, transitioning into a car economy. It is still some time away, when it becomes a super luxury car economy,” he said.

He said deregulation, digilitisation, dollar inflows and forex reserves, declining interest rates, declining crude oil prices and a stable government at the Centre will help spur India’s growth and revival out of the current Covid-induced rut, he said.