● Policy Measures Aimed at Lifting Consumption: To counter the recent loss of economic momentum, the government has rolled out a broad set of steps designed to reinvigorate household spending. Personal income tax relief, lower lending rates, expanded direct benefit transfers, and the proposed revamp of the GST framework are all part of this effort. The upcoming GST 2.0 overhaul, in particular, is expected to provide a meaningful lift to consumption, a view increasingly echoed in corporate earnings calls.

● Revival in Credit Growth: After several months of moderating growth, system-wide credit demand is showing a clear rebound, with overall loan growth returning to double-digit levels from past couple of months. This improvement has been aided by liquidity-enhancing measures such as the CRR reduction, targeted liquidity injections, and policy rate cuts, all of which have supported credit availability and improved borrowing conditions.

● US-India trade deal: The US tariff uncertainity have led to big impact on export oriented sectors and its ripple effect was also visible in certain pockets of the economy. With trade deal is done, which led to 18% tariff much lower than earlier 50%, the same is expected to be big beneficiary for India. Further, it also puts India at the advantageous position vs other compeition nations like Bangladesh and Vietnam who are taxed at 20%. This is expected to benefit materially to sectors like Textile and Gem and Jewellery among others.

● Outlook: Short-term demand has been disrupted by the unusually heavy and early monsoon season, while muted central government capital spending is still weighing on corporate performance. However, the combination of recent policy interventions—DBT enhancements, income tax reductions, and potential GST rate adjustments—should gradually revive consumption trends. We have already started to see intial sign of green shoots as festive period demand was very strong. We believe the sustainability of strong demand is important and remains monitorable.