India's corporate sector is world-class, and JP Morgan says AI won't derail the story

India's corporate sector remains among the strongest globally, according to JP Morgan, despite concerns over artificial intelligence, execution challenges, and US tariffs. The investment bank highlighted execution and valuations as key considerations for investors.

"The Indian story has always been wonderful for the reasons that you mentioned and also for another reason you didn't mention, which is it's got some of the highest quality corporates anywhere around our part of the world," Alex Treves, Managing Director and Investment Specialist at JP Morgan Asset Management, said in an interview with CNBC.

"There are some very very very strong management teams executing there. So that will not finish, that will persist," he said when asked whether AI will replace India's demographic dividends. "Then it's a matter of which business models are going to work and which business models aren't going to work. And a number of us feel a little bit insecure about the role that AI can play in our lives going forward. But it's going to facilitate an awful lot of activity rather than replacing people in the immediate term."

Treves said investors should focus on execution, valuations, and the quality of India's corporate sector. "So in India, what you need to focus on is first execution because the story's always been great - but getting things done in India isn't always straightforward. Second, valuation because it's started to look quite expensive, and then really enjoying the quality of the corporate sector there. Because you've got a lot of the best management teams in the region based in India."

On the issue of US tariffs on Indian exports, Treves said the uncertainty remains, but India's exposure is limited compared with other markets. "It's certainly a concern but of all of the markets that I think around the region which rely on exports, India is nowhere near the top of the list. And I used to live in India and even when I lived in India, most of the things that my kids owned were made in China. So I think that the sort of the world's exposure to the Indian manufacturing sector is not the biggest thing to worry about there," he added.

JP Morgan analysts reiterated India's resilience in a note last month, describing the country as a "relatively safe haven amid trade-related uncertainty" and maintaining an ‘overweight’ stance on Indian equities. "Besides India, Korea, Brazil, United Arab Emirates (UAE), Poland and Philippines are the other emerging markets where JP Morgan has maintained an 'overweight' stance. Falling inflation, enhanced system liquidity and lower borrowing is likely to boost growth. Timely demand stimulus and support to urban household balance sheet bodes well. Recovery in rural economy further aided by a favourable monsoon. India is a relative safe haven amid trade uncertainty," the note said.