Whalesbook
Market experts at the ET NOW Markets Summit 2026 highlighted strong potential in India’s manufacturing and credit sectors. With bank credit growth currently exceeding 17% and interest rates holding steady, investors are monitoring the country's shift toward high-value industrial production and infrastructure spending.
What Happened
At the ET NOW Markets Summit 2026 held this week, leading market voices including Utpal Sheth (TRUST Group), Sridhar Sivaram (Enam Holdings), and Hiren Ved (Alchemy Capital Management) discussed the long-term economic path for India. The experts identified three primary drivers for the next decade: a sustained cycle of spending on business expansion (capital expenditure), robust credit demand, and a resurgence in the domestic manufacturing sector.
The discussion highlighted that while global economic shifts create uncertainty, India’s internal momentum remains strong. The experts expressed a positive view on sectors supporting national priorities like energy security, defense, and high-tech manufacturing, often linked to the growing need for infrastructure that supports digital and artificial intelligence advancements.
The Manufacturing And Spending Shift
Investors are paying close attention to a structural change in how Indian companies are spending. The panel noted that rather than just basic capacity expansion, there is a clear move toward higher-value products. Industries such as energy infrastructure, defense, and specialized electrical equipment are increasingly seen as key beneficiaries. Companies involved in power grid upgrades and industrial hardware have been cited as examples of those helping meet the country's growing infrastructure needs.
The experts emphasized that the focus on manufacturing is a multi-year story. Rather than reacting to short-term news, they suggested that long-term structural trends—such as the modernization of industrial processes and the move toward domestic production—remain the primary growth engines.
The Credit Growth Picture
Financial services remain a central focus for market observers, with credit growth continuing to show double-digit expansion. Recent data from the Reserve Bank of India confirms that bank credit growth reached approximately 17.4% to 17.7% in May 2026, marking several consecutive months of strong loan demand from both retail and corporate borrowers.
However, this rapid expansion in lending brings a specific challenge that investors are monitoring: the widening gap between credit growth and deposit growth. While credit demand is high, deposit mobilization has remained relatively slower, creating a liquidity squeeze that banks must manage. Maintaining a healthy credit-deposit ratio is essential for financial institutions to sustain this lending pace without facing funding pressures.
Interest Rates And Macro Stability
On the monetary policy front, the consensus among experts aligns with the Reserve Bank of India’s current approach. The central bank recently chose to hold the repo rate steady at 5.25% in its June 2026 meeting, maintaining a neutral stance. This decision reflects a balance between managing inflationary risks from global energy and supply chain disruptions while ensuring that growth is not stifled.
For investors, the stable interest rate environment provides some clarity on borrowing costs for businesses. However, the macro environment remains sensitive to external factors like crude oil prices and global geopolitical tensions, which the central bank continues to track closely.
What Investors Should Track
As the market evaluates these long-term themes, several factors will remain important monitorables. First, the ability of the manufacturing sector to sustain high-value production growth will be key to long-term profitability. Second, investors should watch how banks manage the gap between credit demand and deposit growth, as this will influence banking margins and liquidity conditions. Finally, the evolution of RBI’s monetary policy in response to global price pressures will continue to influence the broader sentiment for both equities and credit-sensitive sectors.