Indian Equities Edge Higher as GST Reforms Fuel Optimism

Indian equities extended their winning streak on August 21, 2025, opening in positive territory after five straight sessions of gains. Confidence in landmark Goods and Services Tax (GST) reforms continues to lift sentiment, supported by global cues ahead of the Jackson Hole Symposium.

The Nifty 50 rose above 25,100 while the Sensex climbed past 82,000, both holding near record highs. GIFT Nifty futures also pointed to further gains, trading close to 25,100, defying earlier expectations of a flat start.

Why Are GST Reforms in the Spotlight?

The GST Council has proposed major amendments aimed at reducing complexity and improving liquidity for businesses. Key changes include:

• Movement towards a two-tier GST structure of 5% and 18%, with a 40% rate for sin/demerit goods

• Simplification of compliance processes

• Expanded scope for e-invoicing to improve traceability and transparency

These measures are expected to deliver:

• Lower compliance costs

• Reduced tax disputes

• Faster refunds through streamlined input tax credit

• Greater revenue clarity for businesses and investors

Market Snapshot

Which Sectors Could Benefit From GST Reforms?

• Banks & NBFCs: Lower compliance overheads and clearer tax treatment could reduce costs.

• FMCG: Simplified tax slabs support smooth supply chains and cut disputes.

• Infrastructure & Construction: Streamlined e-invoicing may improve payment cycles and project liquidity.

• Automobiles: Rationalised rates and faster credit claims could lower manufacturing expenses.

• Technology & E-commerce: Wider digital compliance adoption helps online businesses expand more efficiently.

Key GST Reform Highlights

• Move towards uniform GST slabs (5% and 18%)

• 40% GST rate for select sin/demerit goods

• E-invoicing mandatory for businesses with turnover above ₹50 crore

• Rationalisation of tax slabs for consumer durables and appliances

What’s Driving Market Sentiment Beyond GST?

• Global policy focus: Investors await guidance from Fed Chair Jerome Powell’s Jackson Hole speech.

• Global equities: Mixed overnight trade, with US indices easing on tech weakness but Asian markets staying firm.

• Domestic momentum: Strong liquidity and policy clarity continue to support Indian equities near record highs.

India’s markets are entering a pivotal phase, with GST reforms offering clarity and efficiency across key sectors while global cues add an extra layer of momentum. For traders, this mix of structural reform and macro signals highlights the importance of staying informed and agile.

Platforms like Ultima Markets provide investors with the tools, education, and insights needed to navigate these shifts, helping traders make smarter decisions in a fast-moving environment.