A weaker rupee will give Indian exporters a competitive edge over Asian rivals to secure markets after the free trade agreements with the European Union, the United Kingdom and the United States come into force, Saurabh Mukherjea, founder and chief investment officer on Marcellus Investment Advisors told NDTV Profit.
"The Indian economy will have to go through a Sagar Manthan. Effectively, the old era of us exporting IT services worth $400 billion plus remittances to drive a strong currency to fuel consumption is behind us," he said in a televised interview on Thursday.
New Delhi signed an FTA with the UK last year, with the EU in January and is aiming to secure a final agreement with Washington this year. These deals will allow greater access for India goods in rich Western markets.
The rupee has been the worst-performing currency among large emerging Asian economies this year due to geopolitical tensions in the Middle East and relentless foreign portfolio outflows.
"There are broadly six sectors which we think are looking very interesting in the context of what the FTAs have in store for us. The currency is swinging in our favour," Mukherjea said, highlighting optimism from textile manufacturers in Coimbatore against competition with Bangladesh and China during his visit. Auto ancillaries, precision engineering, pharma supply chain and pharma ancillaries and auto OEMs are the others.
"Between Tamil Nadu, Gujarat and Delhi NCR, we are looking at 20 to 30 high quality industrial manufacturing export plays who will benefit from much of what is playing out," he said.
ALSO READ: Market Playbook: Saurabh Mukherjea Favours Quality Blue-Chips, Pharma, Textiles
Chinese Design On Hormuz
Saurabh Mukherjea said the Iran war is fundamentally about the control of oil and the Strait of Hormuz. "Trump wants both. He'll want control of Hormuz and he'll want some say on Iran's oil deposits. But as we've discovered in the last month or so, this has turned out to be far harder than Trump anticipated."
He thinks China is now in a better position to move in, ally with Tehran and jointly control the narrow waterway after Trump shirked responsibility for securing open access to Hormuz and put the onus on oil importing countries. China is the largest importer of oil from the Gulf and one of Iran's closest partners. Beijing also has close commercial links with Gulf Arab countries.
"This will be a terrific coup for China," he said.
ALSO READ: Trump Offers American Oil To Countries Hit With Hormuz Blockade, But With A Message
Watch Saurabh Mukherjea's Full Interview Here
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