UBS Turns Bullish on India as GST, Tax Cuts and Monetary Easing Set to Boost Consumption
New Delhi: Simplified GST rules, income tax cuts, and easier monetary policy are poised to lift consumption in India, according to a new report by UBS, which has upgraded its view on Indian equities to ‘Attractive’ amid expectations of strong earnings recovery. The multinational investment bank has also turned bullish on emerging markets (EM) as a whole.
“We upgrade EM equities (MSCI EM) to Attractive, reflecting a constructive macro backdrop and improving financial conditions supported by Fed easing and a softer US dollar,” UBS analysts said. “Our preferred markets are Mainland China, India, Brazil, and Indonesia.”
UBS noted that the investment case for EM equities has evolved beyond traditional sectors such as commodities and financials. “Alongside the US, emerging markets are among the few regions globally offering direct exposure to structural tech growth,” the report said.
Emerging markets, it added, offer strong diversification potential — ranging from domestically-driven economies like India to more cyclical ones such as Brazil.
UBS has revised its MSCI Emerging Markets Index targets to 1,420 for December 2025 (up 2.2% from the current 1,389) and 1,470 for June 2026.
Meanwhile, the latest IMF regional economic outlook for Asia projects India’s economy to grow 6.6% in FY26, up from 6.5% in FY25, driven by robust Q2 performance and the implementation of GST 2.0 reforms.
The IMF noted that while Asia-Pacific economies have shown resilience through 2025, supported by stronger-than-expected first-half growth, higher US tariffs and rising protectionism could dampen regional export demand in the near term.
“Despite external challenges, India’s strong domestic momentum and tax reforms are expected to outweigh headwinds from global trade tensions,” the report said.
