India’s economy could double to $8 trillion in next decade, AI could be next leg of growth for IT: KKR

India’s economy could double in size to around $8 trillion over the next decade as structural reforms and infrastructure investment raise the country’s growth potential, global investment firm KKR said in a report.

In its October 2026 report titled ‘Thoughts From the Road: Europe and Asia’, KKR said India was among the clearest examples of how sustained structural reforms can deliver gains over a longer horizon.

“Since 2014, the reform agenda, including GST simplification, the Insolvency and Bankruptcy Code, labor market formalization, and a sustained Infrastructure buildout, has quietly reset the country’s growth ceiling,” KKR said.

The economy has now crossed $4 trillion and is “on track to double again over the next ten years”, it said.

KKR said the growth story had not run its course, with “meaningful upside” still available from reforms already implemented, apart from future measures.

The investment firm said its long-term view on India's consumer upgrade remained strong, although it saw a near-term pause with crude oil prices around $100 a barrel.

“What stands out to us, however, is how differently New Delhi has managed this shock relative to many of its Emerging Market peers,” the report said.

“Rather than allowing energy inflation to flow directly into household budgets, government policy has done a good job of shielding the consumer, which should continue to help limit the impact on discretionary spending relative to prior oil shocks,” it added.

On the external front, services exports have continued to surprise positively, while Global Capability Centres (GCCs) are increasingly emerging as an important growth engine alongside traditional IT services.

KKR also pushed back against the view that artificial intelligence could pose a threat to Indian IT companies.

“Our sense from the road is the opposite,” it said, adding that as Indian IT firms embed AI into their service delivery systems, the technology could become “the next leg of growth rather than only a source of disruption”.

KKR said it remained constructive on Asia, citing deeper capital markets, more flexible currencies and healthier reserve positions compared with the mid-1990s.

“What has changed for me is the degree of dispersion within the positive structural stories that we are seeing across various countries,” it said.

KKR said it had also gained greater conviction that the global investment cycle was “broader, more durable, and more inflationary” than previously appreciated.

It recommended an underweight stance on government bonds, while favouring real assets and productivity-driven corporate reform stories in global private equity.

In credit, it favoured capital solutions and higher-quality liquid credit, cautioning investors against moving down the quality curve.

“Now is not the time to stretch down the quality curve,” KKR said.