After a remarkable annoucement by prime minister Narendra Modi about major shift in Goods and Services Tax (GST) reform, set to be rolled out by Diwali as Diwali gift for public. This has caught everyone’s attention, including invetors.
Announced during his Independence Day speech on August 15, 2025, this reform is expected to boost economic growth and become a key market driver.
Seshadri Sen, Head of Research and Strategist at Emkay Global Financial Services Ltd., sees this as a game-changer, and Emkay Global has raised its Nifty 50 target to 28,000 by September 2026, reflecting strong confidence in the Indian Stock market’s future.
According to Sen, the auto and cement sectors stand out as attractive opportunities to benefit from this GST-driven growth. This could be the right time to explore these sectors for potential gains.
“The second-order benefits of the GST rationalization are key: this speeds up formalization of the economy and improves competitiveness of Indian companies. We think the government should absorb the revenue loss through the higher deficit, as the growth accretion will cover the shortfall within 2-3 years,” Sen said in a report.
GST Restructuring To Ease Household Tax Burden and Boost Consumption
This plan of the indian government is to rationalize the GST structure to reduce the tax burden on households and boost consumption. This plan and restucturing will help the day to day consumer having an easy transaction and better finacials. Key changes include eliminating the 12% and 28% slabs and consolidating items into three categories:
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5%: Most items from the 12% slab
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18%: Around 90% of items from the 28% slab
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40%: Luxury and sin goods
Stock Market Opening Today
The market opened on a great start today, with Sensex crossing 81,500 and Nifty breaking 24,900 in early trading session. The recent S&P credit rating upgrade for India boosted foreign investor confidence. Plus, PM Modi’s GST reform strengthened domestic trust and is expected to make daily essentials cheaper, giving a pump to FMCG sector. Globally clues had Wall Street with mixed signals.
Emkay also noted that the 50% US tariffs on Indian goods remain a major concern. However, S&P’s upgrade of India’s sovereign rating to BBB on August 14, 2025, offers a strong positive counterbalance, helping to offset the tariff overhang and boost investor confidence in the country’s economic outlook.
“This is a timely recognition of India’s fortress balance sheet and will serve to calm potential investor fears around the impact of elevated US tariffs. It also, we believe, gives the government more freedom to risk a higher fiscal deficit through GST rationalization,” Sen added.
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