The US is innovation-heavy and has historically taken risks, largely because of its deep fiscal pockets and global dominance. It allows innovation to flourish first and only steps in with regulation once problems emerge—whether in the case of subprime mortgages or crypto. India, by contrast, cannot afford such risk-taking. With no deep fiscal reserves and a still vulnerable population, heavy regulation from the outset is necessary and rightly so.
But regulation without innovation only takes you so far. India’s infrastructure success is remarkable, yet it stems more from risk-averse policies than true innovation. Take AI as an example: Europe is focused on constant regulation, with little actual innovation, while the US gives innovators a free hand until something goes wrong because it can absorb the consequences.
The key point is that countries are at different stages of the cycle. India needs to strike a balance. A 300–400-page red herring prospectus is neither genuine transparency nor effective risk management; it is instead a compliance burden, an exercise in risk-avoidance that often includes everything even what is non-essential.
I don't have much understanding of US markets but I can say for sure that SEBI has done a phenomenal job in creating transpareincy. If there is one thing that works in India is SEBI, fast, precise and on the point. Yes, there are certain areas where regulator should let the market force decide. Over-all apart from last SEBI chiefs, everyone has done a great job in making the Capital Market move forward.
India only liberalized capital markets in the 1990s, decades after the U.S., Japan, and Europe had already built deep financial systems.
By the time India introduced dematerialization, electronic trading, or T+1, the technologies were proven elsewhere. Implementing them wasn’t high-risk experimentation but rather copying best practices with local tweaks.
What looks “bold” in hindsight to me means as inevitable modernization, because staying paper-based would have been unsustainable. 🤷🏻♂️
Irrespective, the execution is praiseworthy. But I don’t see it bold as from an ideation point of view.
Another way to understand it is: Delhi metro is so savvy compared to New York subway. But New York had city subways since 1890s! A time when “political India” didn’t even exist. Does that mean the fanciness of metro in Delhi is bold? There’s definitely greatness in execution which goes to Delhi! But innovation? No!
Well articulated! Given the volume and pace of case clearance in the Indian judiciary, may be the current approach is probably the best one under the circumstance. To be fair, SEBI is also now focusing on reducing compliance burden and hopefully we will reach a middle ground soon.
1. Giving too much importance to religion and mixing it with politics such that development takes a backseat and someone advocating for temples is seen as a Messiah among Hindu voters and someone advocating for Muslims and mosques gets all the votes of Muslims. Speeches during election campaigning give barely importance to education, eradication of poverty, lowering taxes, controlling inflation or providing employment and the public at large isn't even bothered by it.
2. The lack of civic sense is a huge turn-off because of which they are looked down upon in other countries. They would throw plastic wrappers here and there, dump their garbage on the main road, throw things out of moving vehicles, take a leak on the walls and because of all this, the roads around us are so dirty.
3. Indians have a tendency to bask in reflected glory. They feel very proud to hear someone from their state or their country has brought laurels! While that is a very good thing, your personal achievement shouldn't be that someone from your country has achieved something great. Rather than that, work hard yourself and earn that. Even as a Bengali, I feel we are basking in the lost history when stalwarts like Swami Vivekananda, Rabindranath Tagore and Subhash Chandra Bose walked on the soil. It has been a century since then and even though we haven't produced any significant breakthroughs, we are still happy about what we did in the past.
4. Corruption is huge in India and because of this, the government officials don't really care about serving the country or uplifting the society. Their only motto is to fill their pockets. Sub-par roads and highways are killing thousands of people every year, sub-par infrastructure is causing train derailments every alternate day. Crores of rupees are being spent from the top but they rarely reach the public. Most of it gets lost in the middle when it passes from one hand to another.
5. India has become the diabetic capital of the world and that is because of our unhealthy food habits. We are consuming sugar and salt in huge amounts and the fast food outlets are minting money out of this. Half of the people don't even know what's good for them and what's not. They think drinking fruit juice from a Tetra pack is providing them with essential vitamins whereas in reality, they are taking sugar and nothing more. They believe consuming diet Coke is healthier but they don't know the harmful effects of artificial sweeteners. Food habits are something that Indians need to be educated about.
The US is innovation-heavy and has historically taken risks, largely because of its deep fiscal pockets and global dominance. It allows innovation to flourish first and only steps in with regulation once problems emerge—whether in the case of subprime mortgages or crypto. India, by contrast, cannot afford such risk-taking. With no deep fiscal reserves and a still vulnerable population, heavy regulation from the outset is necessary and rightly so.
But regulation without innovation only takes you so far. India’s infrastructure success is remarkable, yet it stems more from risk-averse policies than true innovation. Take AI as an example: Europe is focused on constant regulation, with little actual innovation, while the US gives innovators a free hand until something goes wrong because it can absorb the consequences.
The key point is that countries are at different stages of the cycle. India needs to strike a balance. A 300–400-page red herring prospectus is neither genuine transparency nor effective risk management; it is instead a compliance burden, an exercise in risk-avoidance that often includes everything even what is non-essential.
Well put. Our prospectuses now average 1000 pages! US prospectuses are 150 to 200 pages long.
Sandeep Parekh
I don't have much understanding of US markets but I can say for sure that SEBI has done a phenomenal job in creating transpareincy. If there is one thing that works in India is SEBI, fast, precise and on the point. Yes, there are certain areas where regulator should let the market force decide. Over-all apart from last SEBI chiefs, everyone has done a great job in making the Capital Market move forward.
Agree - SEBI has been an open and market focused regulator - more than any other Indian regulator.
India only liberalized capital markets in the 1990s, decades after the U.S., Japan, and Europe had already built deep financial systems.
By the time India introduced dematerialization, electronic trading, or T+1, the technologies were proven elsewhere. Implementing them wasn’t high-risk experimentation but rather copying best practices with local tweaks.
What looks “bold” in hindsight to me means as inevitable modernization, because staying paper-based would have been unsustainable. 🤷🏻♂️
Irrespective, the execution is praiseworthy. But I don’t see it bold as from an ideation point of view.
Another way to understand it is: Delhi metro is so savvy compared to New York subway. But New York had city subways since 1890s! A time when “political India” didn’t even exist. Does that mean the fanciness of metro in Delhi is bold? There’s definitely greatness in execution which goes to Delhi! But innovation? No!
Similarly so with the markets.
That's a fair comment. Nonetheless, we were the first in many of the modernisation moves.
Well articulated! Given the volume and pace of case clearance in the Indian judiciary, may be the current approach is probably the best one under the circumstance. To be fair, SEBI is also now focusing on reducing compliance burden and hopefully we will reach a middle ground soon.
Thank you!
1. Giving too much importance to religion and mixing it with politics such that development takes a backseat and someone advocating for temples is seen as a Messiah among Hindu voters and someone advocating for Muslims and mosques gets all the votes of Muslims. Speeches during election campaigning give barely importance to education, eradication of poverty, lowering taxes, controlling inflation or providing employment and the public at large isn't even bothered by it.
2. The lack of civic sense is a huge turn-off because of which they are looked down upon in other countries. They would throw plastic wrappers here and there, dump their garbage on the main road, throw things out of moving vehicles, take a leak on the walls and because of all this, the roads around us are so dirty.
3. Indians have a tendency to bask in reflected glory. They feel very proud to hear someone from their state or their country has brought laurels! While that is a very good thing, your personal achievement shouldn't be that someone from your country has achieved something great. Rather than that, work hard yourself and earn that. Even as a Bengali, I feel we are basking in the lost history when stalwarts like Swami Vivekananda, Rabindranath Tagore and Subhash Chandra Bose walked on the soil. It has been a century since then and even though we haven't produced any significant breakthroughs, we are still happy about what we did in the past.
4. Corruption is huge in India and because of this, the government officials don't really care about serving the country or uplifting the society. Their only motto is to fill their pockets. Sub-par roads and highways are killing thousands of people every year, sub-par infrastructure is causing train derailments every alternate day. Crores of rupees are being spent from the top but they rarely reach the public. Most of it gets lost in the middle when it passes from one hand to another.
5. India has become the diabetic capital of the world and that is because of our unhealthy food habits. We are consuming sugar and salt in huge amounts and the fast food outlets are minting money out of this. Half of the people don't even know what's good for them and what's not. They think drinking fruit juice from a Tetra pack is providing them with essential vitamins whereas in reality, they are taking sugar and nothing more. They believe consuming diet Coke is healthier but they don't know the harmful effects of artificial sweeteners. Food habits are something that Indians need to be educated about.
Nice write up! Enjoyed comparative analysis of both markets with different strategies towards protection of investors and trust.