India's equity markets are poised to benefit from global structural shifts, including geopolitical tensions and supply chain realignment, creating long-term opportunities in sectors like manufacturing and defence, according to an ICICI Securities report.
India's equity markets are likely to continue benefiting from structural shifts in the global economy as rising geopolitical tensions, supply chain realignment and a renewed focus on domestic manufacturing create long-term opportunities across sectors such as capital goods, defence, energy, healthcare and financial services, according to a report by ICICI Securities.
The report said the global economic landscape has undergone a structural shift over the past decade, moving away from the era of unrestricted globalisation towards a "new world order" marked by elevated geopolitical risks and inward-looking economic policies. Despite these changes, the report noted that global trade has remained resilient. "Global trade to GDP continues to thrive, ascending to 68 per cent in 2025 from 54 per cent in 2016," it said, attributing this resilience to supply chain diversification, trade rerouting through connector countries, rising services exports and increasing bilateral trade agreements.
According to the report, these evolving global dynamics are creating significant investment opportunities for Indian companies. "Simultaneously, amidst the challenges posed by the new world order, growth opportunities are being created in the Indian equity markets in areas such as manufacturing, defence, energy, discretionary consumption, healthcare, commodities and financial services," the report stated.
Policy Push and Capex Cycle
The brokerage believes policy initiatives aimed at strengthening domestic manufacturing and securing critical supply chains are likely to sustain India's capital expenditure cycle. "One of the clear trends emanating from the new world order is policy push towards incentivising either the setting up of local manufacturing capacity or the securing of reliable supply chains in critical areas such as energy security, defence, critical minerals, data centres and electronics," the report said, adding that capital goods companies are expected to be key beneficiaries of this trend.
Emerging Sectors and Domestic Demand
The report also highlighted that demand is expected to remain strong in emerging sectors such as green energy, electric vehicles, semiconductors, data centres and global capability centres (GCCs), while rising domestic discretionary consumption and financialisation are expected to provide additional support to earnings growth.
Market Performance Reinforces Investment Case
It further observed that the strongest-performing Indian stocks since the pre-Covid period have largely emerged from sectors aligned with these structural themes, including manufacturing, defence, capital goods, energy, commodities and discretionary consumption, reinforcing the long-term investment case for these segments. (ANI)
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