Stock Market On Edge As GST 2.0 Arrives
The upcoming week promises to be a defining one for Indian equity markets, with both domestic reforms and global policy shifts expected to sway investor sentiment. Beginning September 22, the government will roll out the much-anticipated Goods and Services Tax (GST) 2.0, introducing a streamlined two-rate structure. The current four-tier system of 5 per cent, 12 per cent, 18 per cent, and 28 per cent will be replaced with just two slabs: 5 per cent and 18 per cent.
This simplification is aimed at reducing compliance burdens for businesses while creating uniformity across sectors. More importantly, the government has announced significant tax reductions on a wide range of goods, offering immediate relief to consumers. Economists believe this will not only stimulate consumption but also give a fresh push to demand-driven industries such as FMCG, retail, and automobiles. Market experts expect positive traction in these sectors, with a potential ripple effect on overall investor confidence.
H-1B Visa Fee Sparks Concerns For Tech Sector
While GST 2.0 is being welcomed as a growth booster, global developments are adding uncertainty. In a surprise move, US President Donald Trump announced a hefty $100,000 one-time fee for new H-1B visa applications. The policy, though clarified as a non-recurring petition fee that does not impact existing visa holders, has sent shockwaves across India’s technology sector.
Indian IT services companies such as Infosys, Tata Consultancy Services (TCS), and Wipro depend heavily on the H-1B visa program to deploy skilled professionals in the US. Analysts warn that the steep cost of hiring could force companies to recalibrate their overseas operations, potentially eroding profit margins. Investors are therefore likely to keep a close watch on the sector’s performance, with volatility expected in technology counters through the week.
In 2 days. new GST rates apply & Modi Sena was on the moon calling it Modi's biggest reform.
But Trump turned the festive season gloomy for the aspiring middle class.
India alone accounted for 71% of H-1B visas last year. Cheap Russian oil started it & we are paying the price. pic.twitter.com/xM5kRzadyl
— ηᎥ†Ꭵղ (@nkk_123) September 20, 2025
India-US Trade Talks Offer Hope Amid Volatility
Adding to the intrigue, an American delegation is currently in New Delhi for advanced trade discussions. Both governments have signaled constructive progress, raising hopes of a breakthrough that could ease trade barriers and expand market access. A positive outcome from the talks could act as a cushion for the markets, particularly benefiting export-oriented sectors such as pharmaceuticals, textiles, and specialty chemicals.
Analysts note that even incremental agreements on tariff reduction or regulatory cooperation would send strong signals of strengthening bilateral ties. Such progress could partly offset the negative overhang of the H-1B fee hike and reassure foreign institutional investors about India’s trade outlook.
Weekly Market Recap: Momentum Remains Positive
The Indian stock market closed the previous week on a strong footing. The benchmark Nifty rose 0.85 per cent to settle at 25,327.05, while the Sensex surged 721.53 points or 0.88 per cent to finish at 82,626.23. Sectoral indices reflected broad-based optimism, with notable gains across key segments.
The Nifty PSU Bank index jumped 4.83 per cent, leading the rally, while Realty gained 4.43 per cent. Energy stocks climbed 2.31 per cent, and the PSE index advanced 2.19 per cent. Services also edged up 0.95 per cent, signaling resilient market breadth.
Institutional activity revealed an encouraging trend. Foreign institutional investors (FIIs) registered their lowest weekly outflow in weeks, offloading equities worth Rs 1,327.38 crore. Meanwhile, domestic institutional investors (DIIs) remained strong net buyers, pumping in Rs 11,177.37 crore. This steady support from DIIs has been crucial in stabilizing market sentiment amid global headwinds.
Outlook For The Week Ahead
Market observers agree that the coming week will be shaped by the interplay of domestic reforms and international policy developments. On one hand, GST 2.0 could unlock fresh demand and catalyze growth in consumption-driven stocks. On the other, the steep H-1B visa fee poses a direct challenge to the IT sector, with potential spillover effects on overall market stability.
If India-US trade talks yield constructive announcements, the market could witness renewed inflows and improved sentiment. However, caution is likely to remain the underlying theme, with investors balancing optimism around GST reforms against the uncertainties of global policy shocks.
