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(Bloomberg) — India announced measures to invest nearly $133 billion to turbocharge its infrastructure overhaul and boost manufacturing for sectors from textiles to electronic components in its federal budget. It also raised taxes on equity futures to curb speculative trading.
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The nearly 90-minute long speech by India’s Finance Minister Nirmala Sitharaman on Sunday seeks to protect the economy at a time of global uncertainty and continuing 50% US tariffs while the trade deal with the country remains elusive. India’s small businesses were also given a 100-billion-rupees growth fund as well as 20-billion-rupees top up on a 2021 self-reliant fund.
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“We face an external environment in which trade and multilateralism are imperiled and access to resources and supply chains are disrupted,” Sitharaman said while presenting the budget in Parliament.
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While plans to boost manufacturing, data centers and exports boosted some shares, higher transaction tax on equity derivatives led to investors shunning brokerage stocks. The NSE Nifty 50 Index fell as much as 3% after the announcement, before paring the decline partially.
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While further details are awaited on these announcements, here’s a quick look at sectors which are likely to benefit and lose out:
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WINNERS
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Pharmaceuticals
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India announced an outlay of $1.1 billion over the next five years to boost the production and research for biologics and biosimilar drugs. India wants to be a biopharma manufacturing hub, Sitharaman said, especially as more Indians are diagnosed with non-communicable diseases including diabetes and cancer.
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Nifty Pharma Index surged after the announcement, with major players like Sun Pharmaceutical Industries Ltd. and Biocon Ltd. jumping as much as 3.8% and 2.9%, respectively.
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Textiles
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The apparel makers who have been pummeled by Donald Trump administration’s 50% tariffs, are likely to benefit from a number of policy measures announced, including plans to set up ‘mega textile parks.’
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Raymond Ltd. and Trident Ltd. surged more than 8% during trading in Mumbai on Sunday, before giving up some of those gains.
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Electronic Manufacturing
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India announced a $4.3 billion outlay for electronic components manufacturing to propel an industry which has become a focus area as firms such as Apple Inc. boost their manufacturing in India.
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The high-tech pursuits of most of India’s leading conglomerates, such as the Tata Group, Adani Group, Reliance Industries Ltd. and the Godrej Group, are expected to benefit. Shares of local electronics component makers including Amber Enterprises India Ltd., Dixon Technologies India Ltd. and Kaynes Technology India Ltd. gained.
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Data Centers
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A proposal offering tax holiday for foreign companies providing cloud services globally from India-based data centers through 2047 is a boost for cloud infrastructure companies.
