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

A Peep Into the Future Through My Weekly Home-Buys Basket

Is it reading too much in small things and being an alarmist or is it an indicator of things to come? Like every weekend, I went buying vegetables and groceries earlier in the day today. I didn't return home too thrilled at how light my wallet had become. Vegetable prices and food inflation in general are up once again and big time. We got the government's higher inflation figures late last week. But I didn't realise just how bad things had become. Vegetable prices have practically doubled in Delhi and the National Capital Region ijn the past one month. Worse, the quality of supply is dreadful. Things are probably as bad as middle of last year. While oine can blame local and seasonal factors for rise in vegetable prices which may not be the case here but what about groceries? Their prices, especially branded ones, are also shooting up. For example,. the branded rice bag that my family uses is now costing 10 per cent more since the last time I bought it 45 days back. There seems to be price increases on this front too every 45-60 days. Smart FMCG companies are reducing amount and weights in their packs quietly. And when the Prime Minister tells you that the government needs to raise fuel prices, you can be quite sure that this madness will continue for long. The effect of the Budget 2012's increase in service tax and excise will not have percolated to the system still. It might take a month or 45 more days. So, where does this leave the country's and individuals' finances? I, for one, feel that chances of any further cut in interest rates during 2012 is diminishing by the day. We can expect the economic sentiments to continue to weaken with impact being felt both on the rupee, making imports costlier. Like last year, in high inflation times, people will continue to take refuge of  gold and real estate so that they can preserve the value of invested rupees. Of course, people will end up saving less thanks to high inflation and moderate or no pay hikes. What about stock markets? I suspect that we will need to look for goodies like more currency pumping by central banks abroad. Well, I guess its time to change the topic. "Avengers"  anyone?