Utpal Sheth Highlights Winners and Losers in Manufacturing Amid Global Supply Chain Shifts

The Reordering of Global Supply Chains: A Once-in-a-Lifetime Event

According to Utpal Sheth, Founder of Trust Group, the reordering of the global supply chain due to US President Donald Trump’s policies is creating significant opportunities and challenges in the manufacturing sector. In an exclusive interview with N Mahalakshmi on the Wealth Formula Podcast, Sheth explained that this restructuring could potentially throw up big winners and losers within the manufacturing space. This transformation is viewed as a once-in-a-lifetime event, altering global market dynamics and positioning various companies differently, depending on their ability to adapt to shifting supply chains.

Sheth emphasized that global market share dislocation would be a pivotal factor determining success or failure. Companies that can capture a greater share of the restructured market will likely thrive, while those vulnerable to global pricing pressures and trade upheavals may face significant challenges. The evolution of global trade under the Trump administration’s policies has resulted in a recalibration that presents both opportunities and risks, particularly for the manufacturing sector.

Highlights:

• Trump’s policies are leading to a reordering of the global supply chain, creating winners and losers in manufacturing.

• Global market share dislocation will drive success for companies that can adapt.

• Companies vulnerable to global pricing pressures may face significant hurdles.

Indian Market Rebound Led by Financials, Not Reflecting Full Impact of Global Trade Risks

Sheth also discussed the recent rebound in the Indian markets in April, cautioning that this rally should not be interpreted as an indicator that the risks from Trump’s policies have been fully priced in. He noted that the rally was largely driven by financial stocks, which have seen compelling valuations. Financials, according to Sheth, are largely insulated from the disruptions caused by global trade tensions. This makes the recent surge in financials less of an indicator of broader market health and more of a sector-specific uptick, which has not been impacted by the trade upheavals unfolding globally.

Despite the rebound, Sheth pointed out that global trade disruptions and the challenges of adjusting to new global trade dynamics will continue to affect industries other than financials. For the Indian market to fully absorb these risks, there will need to be a deeper understanding of which sectors are more vulnerable and which could benefit from the changing landscape.

Highlights:

• The Indian market rebound in April was driven by financial stocks due to compelling valuations.

• The global trade disruption risks are not fully priced in, as financials remain relatively unaffected.

• Trade upheavals continue to impact industries outside of financials, especially manufacturing.

India’s Consumption Growth Potential Dependent on Underlying Fundamentals

Looking at India’s future growth prospects, Sheth highlighted that the country’s consumption story could become a significant driver of growth, but only if key underlying fundamentals such as income levels and employment begin to show stronger signs of recovery. According to Sheth, India’s consumption growth has been relatively unexciting over the past few years, as the primary drivers of consumption growth—real income levels and employment creation—have not seen substantial improvement. For India’s consumption-driven growth model to regain momentum, there must be more tangible progress in these critical areas.

Highlights:

• India’s consumption growth could drive future economic expansion but is reliant on improvements in income and employment.

• Real income levels and job creation must show stronger recovery for consumption to become a growth engine again.

The Technology Sector and Employment: A Key Catalyst for Consumption Growth

Sheth also pointed out that job creation in the technology sector has been one of the most significant enablers of consumption growth in India over the last 30 years. Historically, the IT sector has created millions of jobs, boosting incomes and driving demand for goods and services. However, Sheth noted a lack of significant job creation in the technology sector recently. As the demand for higher-end consumption items continued to grow, Sheth questioned whether this job stagnation in IT would continue to limit India’s broader consumption potential.

While high-end consumption may continue to thrive due to increased affluence at the top of the income spectrum, mass consumption could be constrained without the broader employment growth that historically drove such booms. Sheth’s remarks underline the fact that employment in the technology sector remains one of the critical catalysts for sustained consumption-driven growth in India.

Highlights:

• Job creation in the IT sector has historically driven consumption growth in India.

• Lack of job creation in the tech sector could limit broader consumption potential.

• High-end consumption may continue, but mass consumption is constrained without broader employment growth.