According to Krishnan: “Tariffs may dominate headlines, but consumption revival, financial deepening, and selective premium plays will define India’s medium-term market story.”
“India’s merchandise exports to the US stood at about $90 billion last year, less than 1% of GDP. Within this, only 55% is subject to the 25% reciprocal tariff. So the direct GDP hit should be contained to 40–50 basis points,” he explained. The second-order impact, he added, could be felt on jobs and export competitiveness if tariffs persist over a longer horizon.
Instead, Krishnan sees domestic consumption — which accounts for nearly 60% of GDP — as the more powerful driver of growth. He highlighted recent government measures like GST rate rationalisation and income tax cuts as factors likely to revive demand ahead of the festive season. “These reforms won’t completely offset the tariff hit but will partially cushion it,” he said.
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On investment themes, Krishnan pointed towards premium consumption as a resilient play. “Within autos, SUVs have become dominant. Hotels too have seen healthy occupancies and RevPAR growth despite the urban slowdown. Quick commerce is another beneficiary of shifting consumption patterns,” he noted, while cautioning against mass FMCG plays that remain exposed to weak wage and employment growth.
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Looking ahead, Marcellus favours financial services as a structural growth story. “NBFCs, particularly vehicle financiers, stand to gain from easing liquidity and lower rates. Beyond that, insurance and wealth management offer long runways for growth given India’s low penetration compared to global peers,” Krishnan said. He also pointed to IT stocks as tactical opportunities after steep underperformance, despite US macro data showing resilience.
