Daily Voice: Any of these 4 possible triggers could spark a massive rally in equity markets, says Green Portfolio PMS' Anuj Jain

However, he emphasized that GST reform strengthens domestic demand, improves the business environment, and enhances the resilience of exporters.

Do you expect tariff pressures to ease if the government undertakes significant GST rationalization?

Modi Ji has announced GST rationalization in his speech on Independence Day from the Red Fort. It would involve merging multiple tax slabs and lowering the GST rate on certain goods and services. That makes life easier for both consumers and businesses. Prices come down a little, tax compliance becomes smoother, and refunds get less messy. For companies, especially mid-sized ones, that means fewer working capital blockages and slightly better profitability.

Exporters do benefit in indirect ways. For example, if GST on packaging, transport, or some raw materials is reduced, the cost base for exporters becomes lighter.

I don’t think GST rationalization will erase pressure from US duty actions, as the impact of it will be minimal on those companies facing the duty heat.

The big picture is that GST reform strengthens domestic demand, creates a better business environment, and makes exporters more resilient — but it can neither replace the trade loss due to duty nor help in new market access abroad. At best, higher domestic demand can offset excess capacity available due to duty actions. However, the affected companies should look for newer markets. It may not be that difficult, since these companies already export to the US with quality products and have proven they can compete successfully in terms of pricing.

Can GST rationalization, along with the restructured tax regime and recent rate cuts, provide a strong boost to consumption and the overall economy?

Yes, this combination can give demand a strong push, but more importantly, it sets direction for the economy. These moves act as indicators for investors and businesses sitting on the sidelines, helping them decide whether to commit capital to India. Lower GST rates bring down prices, a simpler personal tax regime leaves more money in people’s pockets, and rate cuts make EMIs lighter. Together, they free up household budgets and spark spending. The exact impact depends on how deep the GST cuts go, how many taxpayers move to the new regime, and how quickly banks pass on lower rates.

Let’s take GST first– by moving to fewer slabs and cutting rates on everyday goods, businesses face less friction and consumers see more affordable prices. That usually translates into higher volumes in staples, small appliances, building materials, and autos. Companies also benefit from quicker refunds and fewer disputes, improving cash flows.

A cleaner personal tax regime means a higher amount to take home for many salaried households. That extra income usually finds its way into urban services, e-commerce, travel, or entry-level durables before it flows into savings. In this class, the propensity to consume is much higher.

Rate cuts add another layer– cheaper home and auto loans reduce EMIs, freeing monthly budgets and pulling new buyers into the market. Over a few quarters, the cycle extends—more sales, higher capacity use, eventual hiring, and capital expenditure.

Customs duties and global conditions still matter, but domestically, this policy mix can clearly energize demand.

Are you confident that a strong earnings recovery will begin from the December quarter onwards?

Well, it’s a cautious yes, not a blind yes. The earnings base has already absorbed most negatives, and momentum seems to be stabilizing. Some drivers line up well for the second half, but the recovery will likely be uneven across sectors. “Strong” here may simply mean “better than H1, not a boom.”

Various reports from Domestic and International agencies suggest that the Indian GDP will not be meaningfully hit due to the US tariffs. India will continue to be the fastest-growing major economy, with the government extending strong support for businesses. Make in India remains a compelling theme, reinforced by regular policy actions. Completed FTAs (free trade agreements) already add momentum, and those in the pipeline—such as with the EU—could be powerful triggers for the massive growth in Indian manufacturing.

What else could add strength? Faster rate-cut transmission into EMIs, a smoother GST structure supporting consumption, and continued government capex. Risks that remain are the global growth, tariffs, and fresh downgrades in cyclicals.

Do you see any possibility of a postponement in the implementation of the additional 25% tariff on Indian goods?

There’s a narrow window, but the chances look very slim right now. Negotiations have slipped, and Washington has already linked the additional 25% tariff to its stance on Russian oil. The India–US talks that were expected around the 25th were postponed, which further reduces the odds of any last-minute adjustment. For exporters, the practical base case is that the hike will go ahead.

There was a brief flicker of hope after the Alaska meeting that timelines might slip, but official signals since then have been consistent—assume the tariffs arrive on schedule. The only real scenario where the US could roll them back would be a resolution on the Russia–Ukraine front, but that remains an uncertain and distant possibility.

Do you expect the market to regain a positive sentiment sooner rather than later?

Yes, sentiment can turn, but think of it as a dimmer switch, not a light bulb. The mood usually improves gradually as earnings stabilize and policy direction clears, but the tariff overhang may keep investors twitchy in the near term.

Right now, trade headlines dominate. The postponed India–US talks and looming tariff hikes are weighing on risk appetite. Whenever policy noise runs high, money managers tend to stay cautious—it’s almost reflexive. That’s exactly where the market sits today.

But history shows markets move ahead of spreadsheets. In earlier cycles, even a hint of earnings stability or policy relief was enough to lift sentiment weeks before the numbers confirmed it. With downgrades slowing and the Street modeling better H2 growth, the setup is there.

For me, it feels like the market is just waiting to rejoice on the next piece of good news. Possible triggers I’m watching are a US–India trade deal, a withdrawal of tariffs on India under some pretext, a resolution in the Russia–Ukraine conflict, or even a trade deal with the EU. Any of these could spark a massive rally.

Beyond tariffs, what other risks could hamper growth and keep the market in a consolidative phase?

The single biggest risk for markets globally today isn’t just tariffs—it’s the uncertainty around what Mr. Trump will do next. Even if he rolls back tariffs on India, there’s no guarantee he’ll stick to that decision. With such unpredictability, you have to invest with your fingers crossed.

That’s why I prefer staying with quality stocks with credible promoters and strong balance sheet and clear growth plan.

What are your contrarian bets that could potentially lead the portfolio over the next couple of years?

Defence, while not exactly a contra bet, is definitely a sector to watch. On the contrarian side, export-oriented manufacturing stands out. Companies with high-quality products and established relationships in overseas markets are well placed to capture the ‘China-plus-one’ opportunity. The new US tariff may cause short-term pain, but the impact can be cushioned by FTAs already in place and those close to being signed. Chemicals and APIs, after more than three years of a subdued phase, also look like a genuine contrarian play.

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