A New High On Diwali: Will Indian Equities Re-Rate After Govt Moves?

Indian markets are witnessing a confluence of three big developments – GST rate reclassification, S&P upgrading India’s sovereign rating after 18 years, and relief from punitive US tariffs. Together, these changes are expected to reboot Nifty and fuel a fresh risk-on rally in the second half of 2025, after a year of dismal performance. Prime Minister Modi’s decision to trim GST slabs from 5 to 3 is expected to boost consumption and ease household budgets, while S&P’s upgrade of India’s sovereign rating to BBB could lower borrowing costs, attract foreign flows, and improve bond yields. On the trade front, the absence of new US tariffs offers further relief for exporters.

What does all this mean for Indian equities, bond markets, and global investors? To discuss this in detail, we are joined by Harendra Kumar, MD – Institutional Equities, Elara Capital.