1.Consumption recovery gaining traction: The government’s income tax relief measures and GST rationalisation are gradually translating into improved household disposable income and stronger consumption trends. Urban demand has shown early signs of recovery, while rural demand is expected to benefit from a normal monsoon outlook and stable inflation. Consumption remains a key pillar of India’s growth story.

2.Credit growth revival supportive for economic activity: Bank credit growth has improved to low-to-mid teens levels, reflecting healthy demand across retail, MSME and select corporate segments. Stronger credit offtake, coupled with easing interest rates and improving liquidity conditions, should support investment activity and sustain GDP growth momentum over the coming quarters.

3.GST collections indicate resilient underlying demand: Recent GST collections continue to remain robust, demonstrating improvement in economic activity and tax compliance. Strong collections despite GST rate rationalisation suggest that higher transaction volumes and consumption growth are offsetting rate reductions. This reinforces confidence in the strength of domestic demand.

4.US–India trade agreement provides incremental tailwind: Progress on the US–India trade front is a structural positive for exports, manufacturing and investment sentiment. Improved market access and lower tariff barriers should benefit sectors such as engineering goods, textiles, pharmaceuticals and specialty manufacturing, further strengthening India’s medium-term growth outlook.

5.Global uncertainties remain the key monitorable: Geopolitical tensions, including conflicts in the Middle East, fluctuating crude oil prices and global trade-related uncertainties continue to create intermittent volatility in financial markets. While these factors may influence near-term sentiment, India’s relatively strong domestic demand profile provides resilience against external shocks.

6.Earnings outlook remains constructive: Corporate earnings growth is gradually recovering amid improving consumption, healthy banking sector fundamentals and continued government infrastructure spending. While earnings upgrades may remain measured, the broader earnings trajectory continues to support equities over a multi-year horizon.

7.Outlook: While near-term market movements may remain influenced by global events and commodity price volatility, domestic fundamentals remain favourable. Improving consumption, healthy credit growth, strong GST collections, supportive policy measures and a resilient earnings outlook provide confidence in India’s long-term growth trajectory.