Fidelity International portfolio manager Amit Goel suggests Indian equities are maintaining resilience despite anticipated challenges in 2025. These headwinds include a domestic economic slowdown and the impact of policy shifts in the United States. Goel noted that consumption and capital investment have softened following years of robust expansion, which is now affecting corporate earnings across various sectors.
According to Goel, US tariffs, such as the 50 per cent levy on Indian imports and increased costs for H-1B visas, have particularly impacted labour-intensive industries. IT services firms are adapting by increasing local and nearshore hiring. Goel cautioned that potential outsourcing taxes could present a more substantial risk, although reports indicate India is nearing a resolution with Washington regarding tariffs.
Goel highlighted that India’s economy, largely driven by domestic factors, with private consumption accounting for 60 per cent of its GDP and investment at 30 per cent, provides a buffer against external shocks. The Indian economy is supported by government reforms like consolidated labour codes, GST simplification and the 8th Pay Commission, all designed to stimulate both consumption and investment. Monetary easing, including a 100-basis-point rate cut and a reduced cash reserve ratio, is also helping to bolster credit availability.
“India’s domestic demand-led growth model remains intact,” Goel stated, emphasising that robust structural fundamentals and high returns on equity make periods of cyclical weakness appealing for medium-term investment. Fidelity International is a global asset manager that provides investment solutions and retirement expertise, managing assets for institutions and individuals.
