Edited excerpts from a chat:
From your perspective, what does financial independence mean for investors today? Which sectors today best represent India’s march toward economic self reliance (Aatmanirbhar Bharat)?
For today’s investors, “financial independence” means the ability to meet life goals without compromising lifestyle or taking on costly debt,built on three pillars: (i) robust buffers (6–12 months’ expenses, adequate insurance)
(ii) disciplined, rules based investing that compounds ahead of inflation
(iii) diversification across assets, factors and business cycles.
In an era where US tariffs on Indian goods could hit export-heavy sectors (textiles, steel, chemicals), financial independence for the nation means strengthening domestic supply chains and reducing vulnerability to trade restrictions. Now, in India’s Atmanirbhar journey, we see 5 standout pillars:
- Defence manufacturing: Import substitution shields us from foreign supply disruptions. Exports hit a record ₹23,622 cr in FY25, with indigenised systems gathering global traction.
Renewables: Energy self-sufficiency reduces exposure to oil price shocks from Middle East instability. Installed RE capacity reached ~220 GW by Mar 2025, with a record ~22 GW added in H1 2025 - Digital public infrastructure: UPI now processes ~19.5 bn transactions a month (≈628 mn daily, July ’25), lowering frictions and enabling inclusion. The PLI umbrella (₹1.97 lakh cr across 14 sectors) remains a key accelerant of these trends.
- Pharma & biotech: Demand for affordable medicines is global and relatively tariff-resistant.
- Local manufacturing, electronics & FMCG: Smartphone exports jumped to ~$24.1 bn in FY25, up 55% YoY, a flagship PLI success. Catering to India’s massive domestic market provides a natural buffer from global trade wars.
How do you strike a balance between supporting domestic industries and leveraging global opportunities?
The balance shifts when geopolitical winds turn against you. With tariffs, global opportunities don’t vanish, but they require strategic re-routing. How to adapt:
- Double down on domestic growth stories – The rural economy, infra push, urban consumption — these aren’t dependent on trade deals.
- Selective global exposure – Use global ETFs to tap US tech, ASEAN manufacturing hubs, or Europe’s green energy without over-relying on India-US trade.
- Hedging currency risks – The rupee could swing sharply during geopolitical tensions; currency-hedged products can reduce volatility.
- South-South trade – Look at Indian companies shifting export focus to Africa, Latin America, and Southeast Asia where tariff barriers are less severe.
Keep any single theme to 10% or less, and rebalance on a fixed date, not on headlines. A simple basic checklist can help most investors fundamentally at least: is the business improving, is the price fair, and is the trend healthy? If an investment no longer passes those checks, trim it back to target.
What is the investing equivalent of a “freedom struggle” for retail investors
For retail investors, the modern “freedom struggle” is against three foes:
(1) high costs and mis selling
(2) behavioural biases (FOMO, panic selling, anchoring)
(3) information overload
Prefer transparent, rules driven investment vehicles over tips, influencers and telegram groups. Measure risk by “how far can this fall and can I sit through it?” not by short term returns. Cut churn, avoid leverage unless you truly understand it. Quiet, repeatable habits win in the long run.
How can investors symbolically celebrate Independence Day through their portfolios while also making sound financial choices?
To celebrate Independence Day in your portfolio, do something small but permanent: raise your SIP by 10%, rebalance back to plan, and add a modest “India build out” sleeve (5–10%) via diversified baskets across sectors that make sense for you. In today’s tariff-hit world, symbolic patriotism in investing could mean:
- Allocating more to companies building for domestic consumption rather than overexposed exporters.
- Investing in import-substitute sectors — e.g., electronics manufacturing, indigenous defence tech.
- Backing companies with diversified export bases so they’re not dependent on one major market like the US.
- Green & energy security plays — Reducing India’s reliance on volatile global oil markets.
Also, consider a government backed debt allocation for stability, review term and health insurance, and harvest tax losses where allowed. Skip big one day bets. The symbolism is clear, back India’s productive capacity. The prudence is in diversification, costs you can explain, and risks you can sleep with.
What investment principles from India’s independence struggle can be applied to modern day portfolio management?
Lessons from the independence struggle that work in markets:
- Discipline → Our leaders planned for food security amid global uncertainty; you should plan for liquidity during market sell-offs. Follow a plan even when it’s hard
- Patience → In politics, trade negotiations take years; in investing, recovery from macro shocks also demands time. Allow compounding years, not months
- Unity-in-diversity → hold multiple assets and factors so one setback doesn’t sink you
- Self-reliance → Just as Nehru built NAM (Non-Aligned Movement), your portfolio should be India-focused but globally aware. Have emergency cash and low leverage
- Flexibility in tactics → The freedom movement adjusted strategies when faced with new challenges; likewise, shift portfolio weightings when geopolitics changes the risk landscape.
Put this to work with a written plan, periodic rebalancing, and a multi-factor core portfolio (quality, value, momentum, low-volatility etc). Keep fees and taxes low, track mistakes openly, and let data, not drama, decide adds, trims, and exits.
Can MFs surpass FIIs in ownership over the next decade?
With sustained SIP inflows (~₹15,000 to ₹16,000 crore per month as of mid-2025), growing financial literacy, and the rising middle class, it’s very plausible that MFs could surpass FIIs in the next decade. Why it might happen:
- Domestic SIP flows are far more stable and immune to short-term trade headlines — they’re driven by salaried individuals, not hot money. SIP culture is becoming habitual, much like monthly utility bills.
- FIIs are highly sensitive to global trade frictions and political tensions. If Trump’s tariffs escalate into broader trade barriers, FIIs may trim India exposure in favour of “safer” or more open markets.
- Retirement planning, insurance-linked investments, and equity awareness are expanding beyond metro cities into Tier-2/3 towns.
- Regulatory push for retail participation and digital onboarding has made investing almost frictionless.
- If FIIs sell due to macro shocks, MFs may naturally increase their share by buying those very stocks at lower valuations.
However, surpassing FIIs will also depend on:
- Sustained economic growth above 6%+ with SIP inflows keeping pace with GDP and inflation
- Political stability and reform continuity: Policy stability is critical — Atmanirbhar Bharat reforms need to be sustained despite political cycles.
- Continued trust in domestic fund managers and product transparency
- Domestic sentiment must hold even during external shocks (which requires ongoing investor education).
If current trends continue, MF ownership crossing FIIs by 2035 is not only possible — it’s likely.