Speaking to ET Now, Agarwal said India cannot control the US’s constant tariff “flip-flops” but can focus on what is within its reach—boosting domestic manufacturing and consumption. “The government is clearly prioritising self-reliance and competitiveness so that India can become an export hub, not just reduce imports,” he noted.
From tariffs to GST cuts, Agarwal sees India turning challenges into long-term opportunities. His fund is betting on manufacturing, pharma innovation, consumer internet and financials as the next growth drivers.
Sectors in focus
Agarwal highlighted three major opportunity areas for investors:
Electronics manufacturing: Companies like Dixon, Syrma and Amber are positioned to benefit from the government’s push to create a local electronics and semiconductor ecosystem.
Innovation-led CDMO pharma: Young Indian firms are partnering with global research companies, moving beyond capacity utilisation into drug development.Consumer internet: Start-ups are becoming profitable at the unit economics level, which Agarwal sees as a sustainable shift.
GST cuts to drive festive demand
On GST rate cuts, Agarwal said the timing will significantly boost consumption in the festive season. “Between the September 22nd rate change and Diwali, we expect a big bump in demand for autos, home products, personal care and food,” he said, estimating it could add 40–50 basis points to GDP growth.
He also flagged that GST rationalisation signals the government’s reform intent, though further tweaks are needed. Short-term confusion around old inventory pricing remains, but the medium-term outlook is “very positive.”
NBFCs, small banks to benefit
While investors often focus on FMCG, Agarwal pointed to small banks and microfinance lenders as key beneficiaries of higher consumption. “As money flows into the pockets of lower-income households, microfinance and SFBs with exposure to unsecured lending will see growth,” he explained.
Pharma still a long-term play
Despite recent volatility, Agarwal remains bullish on healthcare. Hospitals, diagnostics, and domestic pharma are supported by demographics, rising insurance coverage, and higher per-capita income. The only risk, he cautioned, is overvaluation.
“The domestic healthcare story is evergreen for the next decade. Generic pharma will continue to do well, and innovation-led companies are the most exciting,” Agarwal said, adding that outcomes from R&D partnerships will become visible in the next three to four years.
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