The Bharat Sovereign Fund points outward: overseas strategic investment in energy, minerals and technology at the core of its mandate, global equities as the largest allocation, and the National Investment and Infrastructure Fund's domestic catalytic role treated as a stage to graduate beyond. The reference models, Singapore's Temasek and Norway's fund, belong to countries holding more capital than they could absorb at home. India is the opposite country: it imports capital, and its investment need exceeds what it generates. Is a fund built to send wealth abroad solving the problem India has, or the one it wishes it had?
Start with what the current thinking gets right, because it is most of the design. The Temasek core is sound. India owns a vast base of public-sector commercial assets; Temasek is the proven template for managing exactly such assets commercially while the state retains ownership; and applying that discipline to grow what India already holds, generating non-tax revenue in the process, is the correct use of the model. On that leg the thinking should be followed, not argued with.
The contestable move is one of direction. As conceived, the fund is an outbound deployer of national wealth: overseas strategic assets as a core purpose, global equities as the largest sleeve, and the domestic co-investment function, the role the National Investment and Infrastructure Fund (NIIF) has actually performed, regarded as a capability stage to be superseded rather than scaled.
Direction is the whole question, because a sovereign fund's correct design follows from a single fact about its sponsor: whether the country holds more capital than it can absorb, or less than it needs. A fund that sends national wealth abroad is the right instrument for a country with more capital than it can use at home; India is the opposite country, and what is being contemplated is the opposite country's fund. Norway, the Gulf states and Singapore built outbound funds to place wealth their economies could not absorb. India's investment requirement exceeds what its economy generates, which is why it must import capital year after year.
The fund a capital-importing economy should build does the reverse of exporting wealth: it lowers the price of the capital the country must attract. It co-invests alongside foreign institutions and places its own money behind the same approvals, tariff orders and clearances the foreign investor fears, signalling that the sovereign will not itself be the source of the loss. India already runs this model in miniature. NIIF's master fund, at roughly USD 2.34 billion, drew the Abu Dhabi Investment Authority, Temasek, CPP Investments and others, who took rights to co-invest a further USD 3 billion, more than the fund itself, alongside it. Indonesia runs the same model at national scale: its Investment Authority was seeded modestly in 2021, mandated to attract foreign capital into domestic assets rather than send national capital out, and in 2024 drew foreign direct investment of two and a half times its own equity deployment, with the cumulative multiple since inception higher still. The function being treated as outgrown, drawing foreign capital in and de-risking it, is the one function a capital-importing economy should be scaling rather than retiring.
The decisive difference is what each design does to a constrained sovereign balance sheet. An inbound co-investment fund finances strategic projects with foreign equity and adds nothing to public debt; an outbound fund spends scarce national capital buying assets others already own. For a capital-short economy the first multiplies the binding resource and the second consumes it. There is a genuine case for limited outbound positions, critical minerals and energy security are real exposures, but that case justifies a narrow strategic sleeve, not the centre of gravity of the entire fund.
None of this requires abandoning the design's strengths, because the choice between Temasek and the inbound model is false. India can keep the Temasek discipline for managing its public-sector asset base, make inbound co-investment rather than outbound deployment the fund's principal mandate, and treat NIIF not as a predecessor to graduate from but as the prototype that has already proven the model and lacks only scale. The same hundred billion dollars, pointed inward as co-investment capital, would attract several times more than it could ever deploy abroad; pointed outward, it is the country's scarcest resource leaving home at the moment it is most needed there. The fund being contemplated is credible in its architecture and aimed the wrong way down the flow of capital.