“India is clearly at a disadvantage as far as the tariffs are concerned, versus a lot of its potential labour-intensive manufacturing competitors like Vietnam, Cambodia, Thailand and China, of course,” Vora said.
On the domestic economy, Vora noted that this time of the year is usually slow for some segments, so the recent weakness is not surprising. He expects demand to pick up after the monsoon and harvest seasons, supported by good rainfall and liquidity provided by the government and the Reserve Bank of India. This could lead to a natural cyclical recovery in consumption during the busy festive season.
There are signs of slowdown in urban consumption, particularly in white goods such as air conditioners and refrigerators. Companies in this segment are facing margin pressures, partly due to delays in permissions for Chinese engineers to set up compressor units.In the manufacturing sector, especially durables and electronics including mobile phones, Vora said it has strong long-term growth potential but needs significant capital investment.
Many companies are raising funds to expand into related areas like semiconductors and PCB manufacturing. He added that it is not surprising to see fundraising activity in this sector, as investors are interested in growth stories during bullish markets.
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