Capex vs. Consumption: Where Will Next Market Leaders Emerge?

India is shifting its economic focus from capital expenditure (capex) to consumption. Capex-driven policies fueled an average annualized growth of 30% between FY22 and FY24, benefiting sectors like railways, shipbuilding, and defense. However, the recent budget shifts towards boosting consumption, offering tax relief to individuals with a NIL income tax up to Rs 12 lakh per annum.

Foreign Institutional Investors (FIIs) have been selling Indian equities and moving capital to the attractive US market. This raises the question of where the next wave of market leaders will emerge.