India’s Resilient Markets and the Coming Transformation of Its Exports

Here are edited transcripts of some of my responses as a studio guest to questions on headlines in the live radio programme, Market Mantra, on October 17, 2025. Market Mantra is a popular daily programme on business, economy, and stock markets at All India Radio (AIR). Trajectory of Indian Markets The bounce in the markets on October 17 can be attributed to increased FPI buying, especially major stocks, optimism in future corporate earnings, especially for those companies benefiting from the GST rate cut. This is in addition to a boost in the prospects of banks from the recent RBI announcements, such as those related to M&A activities. Further, among other influences are the signalling effect of reports of RBI shoring up the Rupee and prospects of future interest rate cuts by the US Federal Reserve in the remaining part of 2025. Future Path for Indian Exports 2025 will be a milestone year for Indian exports. Having learnt important lessons, expect a transformation in India’s approach to exports in the future. In the future, expect greater diversification of export markets or destinations. So, you will increasingly find us talking about India’s top 25 markets instead of top 10 export destination countries. Before any spike in manufacturing exports, expect more growth in India’s services exports. This would be especially so for higher-value services like those offered by Global Capability Centres and R&D centres. This would mean moving away from lower-value services such as customer support, which will increasingly get taken over by AI applications. Increasingly higher-value export items will also help India compete better and make it less vulnerable to developments like sudden tariff impositions. India’s Rare Earth Ambitions Rare earths have their own distinct economics. Prospecting and starting to mine rare earths takes ages. But you have to start at some point. It is good that we are putting plans in place though we should have got started “yesterday”. Indian Auto Sector’s Fortune Boost The small car segment is clearly benefiting from the GST rate cut, if we are to believe media reports. I believe this will get reflected in the data and financials of companies soon. I also expect evidence of replacement demand, especially for people graduating to higher car categories such as SUVs. Underappreciated Resilience of Indian Markets The impact of money from individual investors flowing into the markets from mutual funds, life insurance companies and even retirement funds such as those from provident funds, remains under-appreciated. This can be termed as evolution of Indian markets as, unlike in the past, investors remain committed to their market and market-linked investments. This has given Indian markets a level of resilience unthinkable even 10-15 years ago. US-China Trade Talks The US and Chinese economies are so intertwined that if one cares to look beyond the current rhetoric, it is obvious negotiations will happen and a deal is arrived at some point. Listeners may or may not be aware that China is one of the largest investors of US government securities. YouTube Link: https://youtu.be/5yRsnuV4Uus?si=1q6B55tKsldieRBM://youtu.be/5yRsnuV4Uus?si=1q6B55tKsldieRBM

Looking Beyond Moody Markets and Current Uncertainty

 Edited transcripts of some of my responses as a studio guest to questions on the day's headlines in the live radio programme, Market Mantra, on October 10, 2025. Market Mantra is a popular daily programme on business, economy, and stock markets at All India Radio (AIR).

Day’s Market Trajectory

At a time of uncertainty, markets react to whatever information they receive or what they perceive as information. This is often in the form of headlines and reports.

TCS Results and Market Reaction

Markets can behave like moody teenagers and act according to their prevailing mood. There is a narrative in certain sections of the market that Indian IT might have just missed sailing on the AI boom boat, though in the case of TCS, the company is talking of making large data centre investments.

PM Modi-President Donald Trump Phone Call: A Cause for Optimism?

The moment you see an Indo-US trade deal, even if it is a tranche covering low-hanging fruit, markets, especially FPIs, will react positively. You will witness a rush of foreign portfolio inflows, and pressure on the Rupee will ease.

It is worth pointing out that both countries are tough negotiators and have negotiated complex deals like the nuclear deal in the past. If you look beyond the rhetoric, both countries need each other economically. So, the question is not if, but when the Indo-US trade deal will happen.

Prospects of Indo-Australian Defence Partnerships

The key to the growth of the Indian defence sector, both in India and abroad will be how well the sector is opened to private players. This includes start-ups for drones, other aerospace areas, such as drones and satellite technologies.

Rising Inflows in Gold ETFs

This has been influenced by rising gold prices this year. This is similar to high inflows in high-risk sectoral and thematic funds when the stock markets were regularly scaling new highs.

Steady Growth of Inflows in SIPs of Mutual Funds

While looking at healthy mutual fund SIP (Systematic Investment Plans) inflows one needs to keep in mind that they have prevented deep correction of Indian markets in the recent past. They have also taken mutual funds to smaller towns and far-flung areas thanks to various online investment tools.

YouTube link: https://youtu.be/_47eexCxkc4?si=Jc3jYVX2uhaIlxNO