Mark Mobius: Weak Rupee Boosts Export Potential, Trump 2.0 Could Favor India

Veteran emerging market investor Mark Mobius asserts that India's export-driven companies are well-positioned to benefit from a weakening Rupee and the incoming Trump administration's policies. He suggests that India, thanks to recent economic reforms, is poised to become the next key global manufacturing hub after China.

During an interview with CNBC-TV18, Mobius, who leads Mobius Emerging Markets Fund, expressed confidence that India's exports will see significant growth as the country capitalizes on global trade opportunities. "We’re on the brink of seeing more exports from India—not just in software but also in manufacturing," he remarked.

Mobius highlighted that the depreciation of the Rupee, driven by a strengthening U.S. dollar and India’s trade deficit, is likely to persist. He anticipates that companies with dollar-denominated earnings, such as Infosys, will gain a competitive edge. "Exporters will perform better due to the weakening Rupee," he emphasized.

Addressing concerns about stock valuations, Mobius suggested that investors should view them through the lens of growth potential. He downplayed worries about steep price increases, noting that rising stock prices could be justified by corresponding earnings growth. "In an economy expanding at 7-8% annually, leading companies can grow at twice that rate. A 20% increase in stock prices can be supported by their rising value," he explained.

Mobius's optimism regarding India also stems from his belief that the Trump administration will shift away from favoring Chinese imports, positioning India as a key beneficiary. "India remains one of the most attractive investment destinations due to its economic reforms, growth potential, and strong returns on capital," he stated, reiterating his long-term bullish stance. "I aim to have 50% of my portfolio invested in India," the 88-year-old investor added.

Mobius also highlighted the potential benefits of the Trump administration's intent to simplify business regulations in the U.S., which could positively impact foreign investors. He reiterated that India is the "natural choice" for global manufacturing after China, particularly given the ongoing economic reforms.

In the consumer goods sector, Mobius expressed interest in export-oriented companies, noting that India’s competitiveness is steadily improving compared to China. He also advised against overlooking domestic consumption plays, such as housing and FMCG, citing the country’s rising per capita income.

Additionally, Mobius commented on Trump’s proposal to automatically grant green cards to U.S. college graduates, a move he believes could retain top talent. He pointed out that skilled professionals who gain experience in the U.S. often bring valuable expertise back to India. High-profile figures like Elon Musk and Vivek Ramaswamy, appointed to lead the Department of Government Efficiency, have similarly voiced support for retaining H-1B visa holders, recognizing their critical role in the tech sector.

Mobius also mentioned his interest in the semiconductor industry, anticipating that India will eventually compete in both low-end IT services and high-end semiconductor manufacturing. However, he noted that he is still evaluating potential beneficiaries in this space.