The Crossbill News Desk
The Indian government’s recent effort to rationalise the Goods and Services Tax (GST), aimed at boosting domestic consumption and stimulating economic growth, has failed to elicit a strong response from the stock market. In the trading sessions following the announcement, benchmark indices such as the Sensex and Nifty posted only marginal gains of 0.18%.
A report in Financial Express described the market sentiment as “subdued,” with both the Midcap and Smallcap indices declining by 0.7% and 0.5%, respectively.
“The market’s excitement over GST 2.0 reforms is proving to be short-lived as the benchmarks are facing profit booking at higher levels,” Nandish Shah, deputy vice president at HDFC Securities, told Reuters.
The Financial Express analysis attributes the tepid market reaction to several factors. Although GST 2.0 reforms are expected to support economic growth and corporate earnings, concerns over the stiff 50% tariffs imposed by the US President are keeping investors wary.
Many market participants have reportedly used the announcement as an opportunity to book profits, believing limited upside remains. Additionally, foreign portfolio investors (FPIs) continued their selling spree through September, according to the FE report.
Saurabh Mukherjea, founder of Marcellus Investment Managers, told Financial Express, “The GST cuts only partially offset the damage caused by the Trump tariffs. Our largest export destination has effectively jammed us.”
An analysis by India Today highlights that consumer stocks, which had gained 2.7% over the previous five sessions, slipped by 1.1%, weighed down by concerns around Input Tax Credit (ITC)—the GST paid on business purchases.
Consumer stocks reportedly fell 2% following media reports suggesting the government may impose a fresh levy on tobacco products once the existing 40% GST compensation cess expires.
Despite the overall muted response, Financial Express noted that certain sectors have shown resilience since Prime Minister Narendra Modi’s announcement of GST rationalisation on August 15, 2025.
While the immediate market reaction remains lacklustre, analysts maintain a cautiously optimistic view on the reforms’ long-term impact.
A report in Financial Express described the market sentiment as “subdued,” with both the Midcap and Smallcap indices declining by 0.7% and 0.5%, respectively.
“The market’s excitement over GST 2.0 reforms is proving to be short-lived as the benchmarks are facing profit booking at higher levels,” Nandish Shah, deputy vice president at HDFC Securities, told Reuters.
The Financial Express analysis attributes the tepid market reaction to several factors. Although GST 2.0 reforms are expected to support economic growth and corporate earnings, concerns over the stiff 50% tariffs imposed by the US President are keeping investors wary.
Many market participants have reportedly used the announcement as an opportunity to book profits, believing limited upside remains. Additionally, foreign portfolio investors (FPIs) continued their selling spree through September, according to the FE report.
Saurabh Mukherjea, founder of Marcellus Investment Managers, told Financial Express, “The GST cuts only partially offset the damage caused by the Trump tariffs. Our largest export destination has effectively jammed us.”
An analysis by India Today highlights that consumer stocks, which had gained 2.7% over the previous five sessions, slipped by 1.1%, weighed down by concerns around Input Tax Credit (ITC)—the GST paid on business purchases.
Consumer stocks reportedly fell 2% following media reports suggesting the government may impose a fresh levy on tobacco products once the existing 40% GST compensation cess expires.
Despite the overall muted response, Financial Express noted that certain sectors have shown resilience since Prime Minister Narendra Modi’s announcement of GST rationalisation on August 15, 2025.
While the immediate market reaction remains lacklustre, analysts maintain a cautiously optimistic view on the reforms’ long-term impact.
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