Invest with 5 to 7-year horizon to cope with economic cycles

Manufacturing has been in the limelight for some time due to the government's attempts to foster rapid growth in this segment of the economy.

- SARBAJEET K SEN

Investors looking to benefit from the high expected growth may consider investing in manufacturing funds. While several funds belonging to this theme already exist, Tata Mutual Fund recently unveiled the new fund offer (NFO) of Tata Nifty 500 Multicap India Manufacturing 50:30:20 Index Fund.

"The government has been a strong votary of domestic manufacturing. There is a concerted effort by policymakers to raise its share in India's gross domestic product (GDP)," says Gaurav Misra, head-equity, Mirae Asset Investment Managers.

The push factors

Make in India and PM Gatishakti initiatives provided the foundation of the policy framework targeted at boosting manufacturing. Other key policy initiatives aimed at creating manufacturing capacities include production-linked incentive (PLI) schemes, export promotion, and liberal foreign direct investment (FDI) norms. The Atmanirbhar Bharat theme calls for import substitution.

With the China-PlusOne model gaining traction, many multinational companies now regard India as one of the go-to destinations. A considerable amount of investment is expected to flow into manufacturing owing to these initiatives.