For nearly three decades, globalisation was built on one core idea: efficiency. Companies manufactured where costs were lowest, sourced components from multiple countries, and built deeply interconnected supply chains across the world. But over the last few years, that model has started to change. The pandemic, the US-China trade tensions, the Russia-Ukraine conflict, and disruptions in key shipping routes exposed the risks of excessive dependence on concentrated supply chains. As countries and corporations rethink trade relationships and manufacturing strategies, a new global economic order is gradually taking shape.
India was expected to emerge as one of the key beneficiaries of this transition. With its large labour force, improving infrastructure, policy incentives, and expanding domestic market, the country was well positioned to attract a larger share of global manufacturing and supply chain diversification. While India has gained meaningfully from these shifts, the benefits have been uneven across sectors.
One of India’s clearest gains has been in electronics manufacturing and industrial production. India’s electronics exports crossed $47 billion in 2025, rising 37% year-on-year, driven largely by rising smartphone production and increasing localisation by global manufacturers. Apple has significantly expanded iPhone assembly in India over the last few years as part of its broader supply chain diversification strategy. Production-linked incentive (PLI) schemes, government infrastructure spending, and the push toward domestic manufacturing also created strong momentum across sectors linked to capital goods, railways, defence, industrials, and power equipment.
This shift was visible not just in economic activity, but also in market performance. Several manufacturing and industrial segments that remained under-owned for years witnessed sharp rerating between 2022 and 2025 as investors increasingly positioned for a domestic capex and manufacturing cycle. Defence companies benefited from localisation policies and rising exports, while railway, engineering, and power infrastructure businesses saw strong order inflows driven by both public and private sector investment.
At the same time, India remained underrepresented in some of the most valuable parts of the evolving global technology supply chain. The artificial intelligence boom over the last two years created enormous wealth globally, but much of that value accrued to economies and companies involved in semiconductor design, advanced chip manufacturing, GPUs, cloud infrastructure, and data centres. Countries such as the US, Taiwan, South Korea, and China became central to this ecosystem.
Another important shift emerging from recent geopolitical conflicts is the growing focus on energy security. The Russia-Ukraine war and tensions in West Asia once again highlighted how vulnerable oil-importing economies remain to supply disruptions and crude price shocks. India, which imports nearly 90% of its crude oil requirements, remains highly exposed to volatility in global energy markets.
This has important implications for Indian markets and investor portfolios going forward. Energy transition is increasingly being viewed not just as an environmental theme, but also as a strategic economic priority. Sectors linked to renewable energy, power generation, transmission infrastructure, nuclear energy, and domestic energy manufacturing could continue attracting policy support and capital allocation over the coming decade as India attempts to reduce long-term external dependence.
More broadly, the last few years have demonstrated that global trade shifts can significantly alter sector leadership within Indian markets. For nearly a decade, Indian equities were dominated by consumption, private financials, and IT services. However, manufacturing, defence, industrials, railways, and power-related businesses emerged as major beneficiaries of the changing global environment between 2022 and 2025.
Going forward, Indian investor portfolios may increasingly need exposure to sectors linked to domestic manufacturing, infrastructure, energy security, and strategic industrial capacity rather than relying solely on traditional market leaders. At the same time, investors will also need to recognise areas where India still lacks meaningful participation in global value creation, particularly advanced semiconductor and AI infrastructure ecosystems.
The shifts taking place across global trade and supply chains are no longer distant macro trends. They are already visible in the sectors attracting capital, the businesses seeing stronger earnings visibility, and the parts of the market delivering outsized returns. For Indian investors, the bigger opportunity over the coming years may lie in identifying the sectors and businesses that are best positioned to benefit from these changes as the global economic order continues to evolve.
