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Exports are up 17%, so why does almost no investor own an Indian manufacturer?
In this episode of Coffee & Investing, Nandita Rajhansa speaks with Saurabh Mukherjea, Founder of Marcellus Investment Managers, about why he believes Indian exports are at the beginning of a purple patch.
For years, investors have been rewarded for being cynical about Indian manufacturing. Manufacturing has shrunk from 17% of the economy in 2010 to 12.5% today, India’s share of global merchandise trade remains just 2%, and FY26 merchandise export growth was only 1%.
Then came the turn.
India exported $174 billion of goods between April and July, up from around $148 billion a year earlier, led by engineering goods and electronics. Electronics exports alone have grown more than 10x in a decade. Even manufactured exports to China, arguably the world’s toughest market, have risen from $5.7 billion to $7.8 billion.
In this conversation, we explore the four levers behind the shift, the sectors in focus and the risks that could derail the story.
💡 Key Takeaways
⮞ The End of Dutch Disease: With IT services fading, the rupee is no longer propped up by $300–350 billion of inflows and is at its weakest in trade-weighted terms since February 2014.
⮞ Market Access, Finally: The UK trade deal went live on 15 July with zero tariffs on 99% of India’s exports, while the EU deal offers preferential access on 97%.
⮞ A Quarter of the World’s iPhones: Four years ago, India made essentially none. Today, it makes a quarter, highlighting the China+1 opportunity.
⮞ The Defence Build-Up: The West is spending around $1 trillion a year on defence and aerospace. India’s defence exports reached ₹38,000 crore in FY26, up 63% in the last couple of years.
⮞ The Synthetic Garment Opportunity: Synthetics account for 70% of global garments. With synthetic fibre now being produced in India at scale, textiles have a fighting chance, if a US trade deal comes through.
⮞ The Purana Engines Recede: Saurabh expects consumption and financials to give way to export-oriented manufacturing and private-sector provision of public services as portfolio mainstays.
⮞ What Could Go Wrong: The US could offer a sweeter deal to Vietnam or Bangladesh. Bangladesh already exports $45 billion of garments compared with India’s $15 billion.
Saurabh’s view is that as consumption and financials recede, export-oriented manufacturing could become a mainstay of Indian portfolios. Repositioning around such structural shifts has been central to Marcellus’ approach since 2018.
This thinking is reflected in the Consistent Compounders Portfolio, which includes export-oriented manufacturing companies alongside private-sector providers of public services such as healthcare.
Explore the Consistent Compounders Portfolio:
https://invest.marcellus.in/auth?utm_...
Marcellus Investment Managers is a SEBI, US SEC and IFSCA registered portfolio manager.
At Marcellus, our Purpose is to make wealth creation simple and accessible by being trustworthy and transparent capital allocators.
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Characters:
00:00 Coming Up
01:05 The Exports Dichotomy
02:31 The Case Against Indian Exports
05:14 The Turnaround in Export Data
06:08 Where the Growth Is Coming From
08:16 Blip or Decadal Story?
08:40 Lever 1: The End of Dutch Disease
10:46 Lever 2: UK and EU Trade Deals
12:49 Lever 3: China Plus One
14:18 Lever 4: The West’s Defence Build-Up
16:37 Synthetic Garments and Pharma
18:38 What This Means for Portfolios
20:41 What Could Go Wrong?
23:43 How Marcellus Has Repositioned
