India’s next megatrend: Why manufacturing is making a comeback as global supply chains shift

Nimesh Chandan, the CIO at Bajaj Finserv AMC, sees India’s manufacturing renaissance as one of the key megatrends that could shape the country’s investment landscape as global supply chains undergo a structural shift.

Speaking at the Bajaj AMC Markets Symposium, Chandan stressed that the theme is being supported by a combination of deglobalisation, changing global trade patterns, India’s free trade agreements (FTAs) and rising exports.

The broader shift in the global economic order is creating an opportunity for India to strengthen its position as a manufacturing and export hub. Chandan identified “Resurgence of Indian Manufacturing” as one of the key Indian megatrends, alongside digitisation and technology transformation, financialisation, infrastructure and sustainability.

India’s manufacturing opportunity is closely linked to changes in globalisation. Chandan identified deglobalisation, protectionism and populism, geopolitical uncertainties and a shifting global order among the major global megatrends.

FTAs and exports add to the opportunity

Against this backdrop, India’s growing engagement with global markets through FTAs is emerging as another potential catalyst. Chandan identified “India FTAs & Exports” as one of the current megatrends, alongside AI and data centres, electrification, the commodity supercycle, manufacturing renaissance, and financialisation of savings and digitisation.

“Rather than going with the flow, investing in Megatrends means anticipating the flow,” Chandan said.

Chandan also identified engineering goods manufacturing among the megatrends he believes are in the early stages of evolution. This points to a manufacturing opportunity that can extend across multiple industries as India seeks to deepen its participation in global supply chains.

MUST READ: All data sources in public domain, several sub sectors performed better than expected, says MOSPI Secretary on 7.8% GDP growth

Manufacturing could broaden beyond traditional industries

The opportunity is not limited to conventional manufacturing. Chandan listed semiconductor manufacturing, aerospace and defence, and physical AI and robotics among the areas he sees as potential megatrends on the road ahead.

This indicates that the manufacturing opportunity could increasingly encompass higher-value and technology-intensive industries, rather than being restricted to traditional factory production.

The theme also has implications for infrastructure and power demand. India’s transmission capacity is expected to grow 50% over the next 10 years, while power generation capacity is projected to reach around 900 GW by FY32. Renewable capacity is expected to reach about 600 GW, with air conditioning, data centres and green hydrogen identified as major drivers of power demand.

ALSO READ: 'No mechanical boost to GDP numbers': MoSPI's detailed clarification on 7.8% growth

Picking the right businesses

Chandan’s approach, however, is not simply to invest in an entire sector because it is part of a megatrend. The investment process involves identifying businesses that can benefit from the trend, assessing whether the opportunity is monetisable, conducting financial due diligence and determining an appropriate valuation.

“Ignore noise, focus on long-term trends. Targeted trend-based resource allocation,” Chandan said, outlining the approach behind megatrend investing

The manufacturing renaissance, therefore, represents a long-term structural investment theme rather than a short-term sector call. As global supply chains evolve and India deepens its trade relationships, the combination of exports, FTAs and domestic manufacturing could create opportunities across a range of industries.

For investors, the focus remains on identifying businesses and management teams capable of converting these structural changes into sustainable growth.

DO READ: Capital formation, exports fuel 7.8% Q1 GDP growth