Vikas Khemani isn't chasing the crowd into hot IPOs or trendy sector labels. The founder of Carnelian Asset Management, which manages more than $2 billion in assets, says his firm is sticking with a decade-old thesis: India's manufacturing sector is in the early innings of a structural shift, and the recent global trade turmoil has only made the opportunity bigger.
Carnelian launched a dedicated manufacturing fund back in October 2020, well before the theme became mainstream. Khemani says the underlying story hasn't changed — if anything, it has strengthened. India currently derives roughly 15-16% of its GDP from manufacturing.

Khemani expects that number to climb to somewhere between 20% and 25% over the next decade, a shift he calls rare in the history of any large economy. Two developments over the past year and a half have added fuel to that trend, he says. First, the US tariff dispute pushed India to negotiate free trade agreements with other countries — deals that have opened access to markets worth a combined $1.5 trillion.
Second, the rupee has fallen 14-15% against the currencies of India's major trading partners following the West Asia conflict, making Indian exports more competitive and imported goods more expensive for domestic buyers to compete against. Read Here | IIFL sees capital goods margins recovering as order books growKhemani argues the combined effect of cheaper currency and wider trade access is larger than the sum of its parts, giving Indian manufacturers and exporters a meaningful edge.

Within manufacturing, he points to several sub-sectors he's watching closely: specialty chemicals, garments, capital goods, defense, aerospace and electronics manufacturing services . He's also warming back up to chemical stocks after sitting out the space for two to three years — Carnelian exited most of its chemical holdings in 2022 near the top of that cycle.
Khemani, whose fund has held Biocon as a top position, points to the pharmaceutical company's long runway in biosimilars — cheaper versions of biologic drugs — as one reason he remains invested even after a rough stretch for the stock. He added, “Biocon has suffered in last six-seven years.

Generally, we think that the inflection point is around, and there are many more triggers which can kind of take this company forward, and that is our thesis.” The stock was trading at ₹414.30 at 10:25 am on the NSE and has gained more than 15% over the past year.
Read Here | M&G Investments stays underweight IT, consumer staples; favours healthcare, manufacturingAsked about the growing investor interest in auto component makers diversifying into "precision manufacturing," Khemani pushed back on the framing itself.

He said the term has become a marketing buzzword, and that most component manufacturing has always required precision to some degree. His approach, he said, is to evaluate each company on its total addressable market, management quality and financial metrics — not the label attached to it.
On mining, a smaller but growing part of his portfolio, Khemani sees a structural opportunity building as the government pushes to boost domestic mineral output and eases rules for the sector. He added that companies across the value chain — from miners to equipment and services providers — stand to benefit from the policy push.

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