In any economy, the pillars of growth typically rest on three fundamental sectors: Manufacturing, Services, and Agriculture. India, a promising emerging market, excels in both the Agriculture and Services sectors, while Manufacturing retains significant untapped potential till now. But the future is more manufacturing-oriented as the stars are now better aligned.
Source: budget documents
Manufacturing is a cornerstone of economic growth, driving self-sufficiency, exports, and job creation. It reduces reliance on imports, fostering economic stability. The sector also bolsters foreign exchange earnings and nurtures vital symbiotic relationships with services like logistics and finance. Technological innovation and increased productivity stem from manufacturing, spurring overall growth. It serves as a crucible for inventive research and development, propelling transformative technologies. Importantly, it offers substantial employment opportunities, lowering unemployment rates and elevating living standards, underpinning a nation’s economic well-being.
Manufacturing: A Key Driver of India’s Growth
The shift from agriculture, which currently employs over 40% of the Indian workforce, to a manufacturing-based economy can substantially contribute to economic growth and generate more employment opportunities. Towards this, the government has also implemented several positive initiatives for the Manufacturing sector, such as the Production Linked Incentives (PLI) scheme. This initiative aims to enhance domestic manufacturing, reduce import dependency, and generate employment. Additionally, infrastructure development in the form of expressways, railways, airports, ports, and logistics synergies under the PM Gatishakti National Master Plan is set to boost the manufacturing ecosystem.
Some examples of the infrastructure focus are, completing 25,000 km national highways in 2022-23. Extending coverage under Kavach (the indigenous world class technology), One Station One Product concept to help local businesses & supply chains & developing 100 PM Gati Shakti Cargo terminals for multimodal logistics
India’s competitive labor costs and the need to diversify supply chains also puts India as one of the destinations. Capex by latest MNCs in India shot up by 22% YoY in March-23 which was led by sectors like Metal & Mining, Auto, Chemicals etc.
A youthful population and increasing consumption favor the Manufacturing theme. Moreover, a robust domestic Capex cycle, coupled with debt reduction and high profit margins, offers potential benefits for the manufacturing sector.
Why Choose ICICI Prudential Manufacturing Fund?
The ICICI Prudential Manufacturing Fund is aligned with the Manufacturing theme’s growth potential. Also, the fund has consistently outperformed its benchmark Index over 1 & 3-years.
4Focused on Manufacturing: The fund allocates a minimum of 80% of its assets to companies engaged in the manufacturing sector, providing investors with exposure to the industry’s growth prospects.
4Diversified across Sectors: With the flexibility to invest in both cyclical and defensive sectors within the manufacturing domain, this fund offers risk diversification and the opportunity to capture growth in various segments.
* Blend of Growth & Value: The ICICI Prudential Manufacturing Fund employs a balanced investment style that combines growth and value-oriented strategies, optimising returns while managing risk.
* Market Cap Agnostic: The fund is not constrained by market capitalisation, enabling it to invest in companies of all sizes, from large to mid and small-cap firms, providing flexibility and potential for higher returns.
For those interested in harnessing the growth potential of the Manufacturing theme, the ICICI Prudential Manufacturing Fund presents a compelling opportunity.
