A new report by UBS, a multinational investment bank that has a bullish view on emerging markets (EM) and a “attractive” view on Indian equities amid expectations for earnings recovery, claims that the simplification of the GST, income tax reductions, and central bank easing will increase consumption in India.
“We upgrade EM equities (MSCI EM) to Attractive, reflecting a constructive macro backdrop and improving financial conditions on the back of Fed easing and a softer US dollar,” UBS analysts said. Mainland China, India, Brazil, and Indonesia are our top markets.
Since the asset class’s inception, the argument for investing in EM companies has changed considerably since, according to the financial services company, many EM stocks represent much more than just a bet on commodities and financials.
According to UBS, emerging markets are one of the few places in the world that provide direct exposure to structural tech growth, along with the US.
Because emerging markets include both more cyclical economies like Brazil and domestically oriented ones like India, they also serve as portfolio diversifiers.
The MSCI Emerging Markets targets set by UBS have been increased to 1,420 by December 2025 (up 2.2% from the current level of 1,389) and 1,470 for June 2026.
India’s economy is expected to grow at a solid pace of 6.6% this year (FY26), up from 6.5% in 2024 (FY25), according to the most recent International Monetary Fund (IMF) regional economic outlook report for Asia. This rise is attributed to strong Q2 growth and GST 2.0 changes.
Since April 2025, the outlook for India has brightened since robust Q2 growth and the GST reform are anticipated to offset the adverse effects of rising US tariffs on the demand for Indian goods.
Despite both internal and foreign problems, the Asia-Pacific region’s economies have shown resilience in 2025, registering stronger-than-expected economic growth in the first half of the year. However, the IMF stated that rising protectionism and higher US tariffs will probably lower demand for Asian exports and eventually hinder GDP in the near future.