India at an inflection point as capex, manufacturing and trade deals align, say experts

Government and private capex revival strengthens growth outlook.

• India's growth driven by policy, manufacturing, and trade deals
• Budget 2026 and global trade seen as key growth catalysts
• Manufacturing reforms and capex boost support economic expansion

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India’s growth narrative is entering a new phase, powered by policy support, manufacturing momentum and shifting market leadership, speakers said at a session on “Budget 2026 & Global Trade Deals: India’s Next Growth Triggers”, at the Crystal Gazing Summit, organised by PMS AIF WORLD.

The discussion, moderated by Ritika Farma, Director at PMS AIF WORLD, examined how the upcoming Budget and evolving global trade partnerships could shape India’s economic trajectory.

A multi-engine growth cycle taking shape

“India is at an inflection point,” said Manoj Bahety, Co-founder, Carnelian Capital. He described the current phase as the making of a “multi-engine growth cycle”.

Government capital expenditure has tripled over the past few years - from Rs 4 lakh crore to nearly Rs 12 lakh crore - while private capex has also revived, crossing Rs 11 lakh crore last year. This combination, he argued, has made growth broad-based rather than dependent on a single driver.

Fiscal support, along with cumulative rate cuts of 125 basis points, has improved liquidity and lowered borrowing costs. With a strong manufacturing push, expanding trade ties, 14–15% credit and earnings growth, and GDP growth hovering around 7.8%, Bahety maintained that fundamentals remain resilient despite softer market sentiment.

Manufacturing as the growth fulcrum

Sanjaya Sathpathy, Fund Manager at Ampersand Capital, emphasised that manufacturing will be central to India’s next growth phase.

While global uncertainty persists, India’s macroeconomic base remains steady, supported by consistent growth, a proactive Budget stance and expanding free trade agreements (FTAs). However, trade deals are a double-edged sword — they open new markets but also intensify competitive pressures.

This makes domestic manufacturing strength critical. Sathpathy pointed to labor reforms, relatively stable power costs, improved logistics and robust export momentum across sectors such as automobiles and capital goods as evidence that the ecosystem is steadily improving. The structural groundwork, he suggested, is being laid for sustained industrial expansion.

A quant lens on market volatility

Offering a data-driven perspective, Praveen Kumar, CIO at Alphagrep, said markets are currently reflecting elevated uncertainty and rapid sector rotations.

Flows have shifted from secular growth themes toward cyclicals such as capital goods, metals, industrials and select financials. At a factor level, value has staged a comeback after a prolonged period of underperformance.

However, Kumar cautioned that the dominant signal from the data is a lack of persistence. Trends are not sustaining for long, and market leadership is changing quickly. In such an environment, he advised against aggressive positioning around a single theme.

“Our approach remains balanced,” he noted, with a preference for reasonably valued stocks rather than chasing high-growth momentum trades.

Budget and trade as twin catalysts

The session underscored that Budget 2026 and evolving global trade alignments could act as twin catalysts for India’s next growth leg. With public and private capex rising, manufacturing gaining traction and macro fundamentals stable, India appears positioned for durable expansion — even as markets navigate short-term volatility and shifting leadership.

The consensus: while sentiment may ebb and flow, the structural drivers of growth remain firmly in place.

PMS AIF WORLD is India’s leading wealth services firm specialising in alternative investments, serving over 800 clients across Rs 2,200 crore in PMS and AIF assets. The firm follows a knowledge-first philosophy with the belief that when knowledge leads, wealth follows, and it focuses on delivering well-informed investing for its alpha seeking clientele.

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