Indian Stocks to Get Lift From Modi Stimulus, Says Kotak Mahindra AM Chief

Could government stimulus be the jet fuel for India's stock market? The head of one of the country's largest asset managers believes so. According to a December 24, 2025 report from Nikkei, Nilesh Shah, president of Kotak Mahindra Asset Management, argued that a government economic stimulus plan will support the country's equities by fueling domestic consumption and corporate earnings.

Stimulus-Fueled Consumption to Drive Growth

Shah's bullish case rests on a straightforward economic sequence. He projects that the government's stimulus measures will directly boost rising domestic consumption. This increase in consumer spending is expected to translate into higher corporate revenues and profits, which in turn provides a solid foundation for stock market growth. For Shah, this virtuous cycle makes Indian stocks an attractive proposition on a 'risk-return' basis.

Key Themes: Consumption and Manufacturing

In line with this outlook, Kotak Mahindra Asset Management has identified consumption and manufacturing as its key investment themes. These sectors are positioned to be the primary beneficiaries of the government's economic agenda. The firm is betting that companies in these areas will lead the market as domestic demand strengthens, bolstered by India's vast and youthful population.