The fund’s introduction comes amid expectations of a potential pickup in domestic consumption, supported by factors such as the FY26 tax-rate reduction, GST 2.0 revisions, the upcoming Eighth Pay Commission cycle, relatively moderate inflation, and supportive monetary measures. A strong monsoon has also contributed to improved sentiment.
Consumption-linked equities have historically shown periods of relative outperformance. According to Bloomberg data, the Nifty India Consumption TRI outperformed the broader market in 13 of the last 19 years. Between 2019 and 2024, the index recorded an average return on equity of 14.7%, compared with 12.5% for the Nifty 500.
The scheme will follow a thematic framework that categorises consumption-oriented businesses across four segments: Reach (companies increasing product penetration such as durables and packaged foods), Intermediates (platforms and enablers including digital and financial services), Spend Up (premiumisation-oriented sectors such as SUVs and real estate), and Experience (areas driven by discretionary spending such as travel, hospitality and entertainment).
The launch also aligns with broader economic shifts. As per IMF estimates, India’s per-capita income has nearly tripled since 2008 and is expected to rise 1.6 times by FY2030. The number of households in the upper-middle, middle and affluent segments is projected to increase from 11.3 crore in 2023 to 18 crore by 2030.
The Union Consumption Fund will be managed by Vinod Malviya and Sanjay Bembalkar. Investors are advised to review the Scheme Information Document and consult financial advisors before making investment decisions.
