India at a Crucial Inflection Point as Capital Expenditure, Manufacturing, and Trade Agreements Converge: Experts' Analysis

India's Growth Narrative Enters a New Phase

At the Crystal Gazing Summit, organised by PMS AIF WORLD, a session on "Budget 2026 & Global Trade Deals: India's Next Growth Triggers" examined how policy support, manufacturing momentum, and shifting market leadership are driving India's economic trajectory.

A Multi-Engine Growth Cycle Takes Shape

According to Manoj Bahety, Co-founder of Carnelian Capital, India is at an inflection point, marking the beginning 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 revived, crossing Rs 11 lakh crore last year. This combination has made growth broad-based rather than dependent on a single driver. Fiscal support, along with 125 basis points of cumulative rate cuts, has improved liquidity and lowered borrowing costs.

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Manufacturing as the Growth Fulcrum

Sanjaya Sathpathy, Fund Manager at Ampersand Capital, emphasized that manufacturing will be central to India's next growth phase. Despite global uncertainty, India's macroeconomic base remains steady, supported by consistent growth, a proactive Budget stance, and expanding free trade agreements (FTAs). Domestic manufacturing strength is critical, with labor reforms, relatively stable power costs, improved logistics, and robust export momentum across sectors such as automobiles and capital goods.

A Quant Lens on Market Volatility

Praveen Kumar, CIO at Alphagrep, offered a data-driven perspective, highlighting that markets are currently reflecting elevated uncertainty and rapid sector rotations. Flows have shifted from secular growth themes toward cyclicals, with value staging a comeback after a prolonged period of underperformance. However, Kumar cautioned that trends are not sustaining for long, and market leadership is changing quickly.

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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.