GST rationalisation sparks optimism, but global investors stay cautious

The long-awaited Goods and Services Tax (GST) rate changes have become a major topic for Indian markets. Investors believe this shift could create value in certain sectors, even as global investors remain cautious.

Jonathan Schiessl, an experienced global investor, in an interview with ET Now, described the reform as a clear positive. He mentioned that his firm focuses on the long-term picture instead of short-term policy shifts. “These changes aim to boost specific sectors, and they do create excitement in the market. But for us, it’s not something we focus on too much,” he told ET Now.

Sideways markets keep investors cautious

Indian stocks have moved sideways over the past few months, with corrections driven by tariff issues and global uncertainties. Schiessl acknowledged that his fund reduced its exposure earlier this year and has not yet reinvested aggressively.

“We are content to hold our long-term investments. The broader market has been digesting tariff-related news. India remains above its recent lows but is off its highs. For now, we prefer to keep a neutral stance until valuations look more appealing,” he said.

Global markets gaining attention

Interestingly, as India deals with tariff worries, other Asian markets have started to attract significant investment. Schiessl noted that Hong Kong and Chinese stocks have shown strong gains this year, pulling in capital from smaller ASEAN markets.

“A year or two ago, China was seen as almost uninvestable. Now, investors are moving back into Chinese markets, which have risen but still seem attractive from a valuation standpoint. There appears to be real momentum there, despite ongoing tariff uncertainties,” he observed.

What’s next for India?

Market experts say GST changes could provide a much-needed boost for Indian stocks. Consumer-focused sectors, manufacturing, and logistics are likely to benefit the most from reduced tax complexities. However, with global capital flowing into China and other Asian markets, India may need deeper reforms and clearer tariff policies to reclaim its position as a regional leader.

For now, long-term investors like Schiessl remain cautiously optimistic—holding their key positions but waiting for more attractive opportunities to increase their investments in India.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)