Indian equities are poised for a strong start on Monday, August 18, with Nifty futures indicating a gap-up opening of more than 300 points, lifting the index above 24,900. The sharp rally in sentiment comes on the back of the government’s announcement of next-generation GST reforms, which will lower tax rates across a wide range of goods and services and is expected to provide a meaningful boost to consumption.
Brokerages have turned positive on the development, noting both near-term and structural benefits. Motilal Oswal highlighted that second-generation GST reforms will ease household tax burdens and boost consumption, with nearly 99% of goods in the 12% slab expected to move to 5%, cutting retail prices by about 4–5%. Key beneficiaries, it said, include consumer staples, autos, cement, hotels, retail footwear, durables, logistics, quick commerce, and EMS, with top stock picks like HUL, Britannia, Maruti, Ashok Leyland, Ultratech, Voltas, Amber, Delhivery, Lemon Tree, Swiggy, HDFC Bank, and Bajaj Finance.
Emkay Global called the move to a two-slab GST structure a positive policy intent but flagged potential fiscal costs, estimating a 0.2% of GDP slippage if implemented from October 2025. It sees CPI inflation easing by 50–60 bps over the next year, with autos, durables, cement, and allied sectors gaining the most from consumption demand.
Antique Stock Broking noted that GST rate rationalisation could impact 5–6% of GST collections annually, but combined with festive tailwinds, the changes could fuel a recovery in the second half of FY26.
The reforms, pitched as a “Diwali gift” by Prime Minister Narendra Modi, include rate cuts on essentials such as groceries, bicycles, and education from 12% to 5%, and electronics and appliances from 28% to 18%. Luxury and sin goods will be brought under a 40% GST slab. Analysts believe this will directly ease household budgets and spur demand across key sectors, further strengthening India’s consumption-driven growth outlook.
