GST Meet starts in the midst of the market; Investors Eye Consumption push

The long-awaited two-day goods and service tax (GST) Meet starts today, but market participants seem surprisingly modest despite the potential for important policy announcements.

Speaking with Et Now, Vikash Kumar Jain emphasized that investor sentiment has cooled considerably in the past year. “It was hard to find foreign investors who are bullish about India,” he said. “Only 12 months ago, markets touched new highlights, and it was difficult to find someone Bearish. Now that sentiment is completely reversed.”

Jain emphasized that the reaction of the market will largely depend on the scale and perception of the GST changes. “If the government introduces a measured overhaul that is aimed at specific raw materials, the impact will be selective. But a broader GST reduction aimed at stimulating consumption can be seen as a positive surprise, pushing domestic growth and stimulating a stronger market response,” he noticed.

Despite the encouraging of GDP data and a strong economic background, foreign institutional investors have remained largely absent, whereby the net outflows have reached considerable levels in recent months. Jain attributes this to both appreciation problems and changing global perceptions. “The long -term story of India remains promising, but recent geopolitical shifts and renewed interest in other emerging markets, such as China, have made them carefully for the short term,” he explained.

He added that the India’s market, although it performs under the benchmarks of emerging markets in the past year, has also become relatively cheaper on a historical basis. “The premium versus global benchmarks have cooled, but we are still above average. It is a gradual process and without a visible trigger can take investment interest time to return,” Jain noted.

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While the GST unfolds, analysts say that any signal from a consumption push or broader economic support can restore the confidence of investors. In the meantime, the market is coming into the event with a feeling of careful optimism, with a weight of the potential for policy releases against the background of modest foreign participation.