AMIDST CONTINUOUS SHIFTS IN TRADE POLICIES AND GLOBAL UNCERTAINTIES, INDIA’S EQUITY MARKETS EXHIBITED MEASURED YET RESILIENT PERFORMANCE: ECONOMIC SURVEY 2025-26

1. At a Glance

• Economic Survey 2025-26 (Ministry of Finance, DEA) assessment of Indian capital markets: equities held up "measured yet resilient" despite global trade-policy churn and geopolitical stress [S1][S2].
• Headline read-through: retailisation of Indian markets (demat, SIP, MF), buoyant primary market, and a major regulatory consolidation via the Securities Markets Code, 2025 [S1].
• UPSC relevance: GS-III (Indian Economy — capital markets, mobilisation of resources, financial inclusion); recurring Prelims hooks on SEBI initiatives, demat/SIP numbers, and corporate bond market.

2. Why in the News

• Tabled as the pre-Budget Economic Survey 2025-26 in Parliament (Jan 2026 cycle); the chapter on Monetary & Financial Sector Developments flagged equity-market resilience amid US/global tariff shifts and FPI volatility [S1][S2].
• Securities Markets Code, 2025 announced as a consolidating statute for securities regulation [S1].

3. Background & Evolution

• Securities market regulator SEBI statutory under the SEBI Act, 1992; allied statutes: SCRA 1956, Depositories Act 1996, Companies Act 2013 [general framework].
• Demat ecosystem expanded post-1996 (NSDL) / 1999 (CDSL); recent decade saw smartphone-led retail surge.
• SIP route for mutual funds scaled from ~3.1 crore unique investors in FY20 to >11 crore by FY25 [S1].
• Securities Markets Code, 2025 is the first consolidation attempt of multiple securities laws into a single Code [S1].

4. Core Static Facts

• Document: Economic Survey 2025-26, Ministry of Finance, Department of Economic Affairs [S2].
• Chapter context: Monetary and Financial Sector Developments [S3].
• Regulator: SEBI (HQ Mumbai; statutory under SEBI Act, 1992).
• Equity returns (Apr–Dec 2025): Nifty 50 +11.1%, BSE Sensex +10.1% [S1].
• Demat accounts: 235 lakh added in FY26 till Dec 2025; total >21.6 crore [S1].
• Unique investors with demat: crossed 12 crore in September 2025; ~1/4 women [S1].
• Mutual fund unique investors: 5.9 crore as of Dec 2025; 3.5 crore from beyond Tier-1/Tier-2 cities (B-30) [S1].
• SIP unique investor base: ~3.1 crore (FY20) → >11 crore (FY25) [S1].
• Corporate bond market CAGR: ~12% between FY15 and FY25 [S1].
• Primary market: India led the world in IPO issuances in FY26 (till Dec 2025) [S1].
• SME listings: 217 in FY26 (till Dec 2025) vs 190 in FY25 (till Dec 2024); amount mobilised ₹7,453 cr → ₹9,635 cr [S1].
• Securities Markets Code, 2025 covers: board composition, independence, conflict management, transparency, regulatory sandboxing, investor protection, governance of Market Infrastructure Institutions (MIIs), and ease of doing business [S1].

5. Multi-Dimensional Analysis

Economic - Equity gains during global tariff churn signal decoupling resilience via domestic flows (SIP/MF) cushioning FPI volatility [S1]. - Deepening corporate bond market (~12% CAGR FY15–FY25) reduces over-reliance on bank credit and aids infra financing [S1].

Social / Financial Inclusion - Women ≈ 25% of 12 crore unique demat investors — measurable broadening of investor base [S1]. - B-30 cities contribute 3.5 of 5.9 crore MF investors — geographic democratisation of capital markets [S1].

Legal / Regulatory - Securities Markets Code, 2025 consolidates fragmented securities laws; introduces regulatory sandbox statutorily and formalises MII governance [S1]. - Reinforces SEBI's mandate under SEBI Act, 1992 over investor protection, market integrity, ease of doing business [S1].

Administrative / Governance - Codification reduces compliance friction across SCRA 1956 / Depositories Act 1996 / SEBI Act 1992 — improves regulatory certainty [S1]. - MII governance norms touch NSE/BSE/NSDL/CDSL/Clearing Corps — systemically important institutions.

Geopolitical / External - "Continuous shifts in trade policies" — implicit reference to US tariff actions and global supply-chain re-alignment; FPI flows remained volatile but domestic flows offset [S1].

6. Recent Developments (last 12-18 months)

• Jan 2026: Economic Survey 2025-26 tabled, flagging equity resilience [S1][S2].
• Sep 2025: Unique demat investor count crossed 12 crore [S1].
• FY26 (Apr–Dec 2025): Nifty +11.1%, Sensex +10.1% [S1].
• 2025: Announcement of the Securities Markets Code, 2025 as consolidating legislation [S1].
• FY26 (till Dec 2025): SME IPO mobilisation jumped to ₹9,635 cr [S1].

7. Prelims Hooks

• Nifty 50 and BSE Sensex gained 11.1% and 10.1% during April–December 2025 [S1].
• 235 lakh demat accounts added in FY26 till Dec 2025 [S1].
• Total demat accounts crossed 21.6 crore [S1].
• Unique demat investors crossed 12 crore in September 2025 [S1].
• ~25% (one-fourth) of unique demat investors are women [S1].
• 5.9 crore unique mutual fund investors as of Dec 2025 [S1].
• 3.5 crore MF investors from beyond Tier-1/Tier-2 (B-30) cities [S1].
• SIP unique investor base: 3.1 crore (FY20) → >11 crore (FY25) [S1].
• Corporate bond market grew at ~12% CAGR between FY15 and FY25 [S1].
• India led the world in IPO issuances in FY26 (till Dec 2025) [S1].
• SME listings: 217 in FY26 (till Dec 2025) vs 190 in FY25; mobilisation rose from ₹7,453 cr to ₹9,635 cr [S1].
• Securities Markets Code, 2025 introduces statutory regulatory sandbox and MII governance norms [S1].
• Economic Survey released by Ministry of Finance (Department of Economic Affairs) [S2].
• SEBI is the statutory regulator under SEBI Act, 1992.

8. Mains Relevance

• GS-III — Indian Economy: Mobilisation of resources; capital markets; financial inclusion.
• GS-II — Statutory Bodies: SEBI; regulatory reform.
• Plausible question stems: 1. "Discuss how the retailisation of Indian equity markets has altered the resilience of the financial system to external shocks." (GS-III) 2. "The proposed Securities Markets Code, 2025 marks a paradigm shift in securities regulation in India. Examine." (GS-II/III) 3. "Despite global trade-policy uncertainty, Indian equity markets sustained gains in 2025. Analyse the factors and risks." (GS-III)

9. Related Topics to Study Next

• SEBI Act, 1992 & SEBI organisational structure — parent statute for market regulation.
• Corporate Bond Market in India — RBI/SEBI committees, infra financing.
• Mutual Funds & SIPs — AMFI data, B-30 incentives.
• FPI/FDI flows — cyclicality vs domestic flows.
• IPO regulation & SME platforms (NSE Emerge, BSE SME) — disclosure and listing norms.
• Financial Inclusion — Jan Dhan, demat, women investor participation.
• Market Infrastructure Institutions (MIIs) — stock exchanges, depositories, clearing corps.
• Regulatory Sandbox — RBI's fintech sandbox; SEBI's innovation sandbox.

10. Common Errors / Trap Areas

• Time window confusion: Nifty/Sensex returns are for Apr–Dec 2025 (FY26 9 months), not calendar 2025 or full FY26.
• Unique investors ≠ demat accounts: 12 crore unique investors vs 21.6 crore accounts (one investor can hold multiple accounts) [S1].
• B-30 definition: "Beyond Tier-1/Tier-2" in survey context = Beyond top 30 cities (B-30) in AMFI/SEBI parlance.
• Code vs Act: "Securities Markets Code, 2025" is a consolidating Code, not an amendment to SEBI Act 1992; do not confuse with DESH Bill or Companies Act.
• Corporate bond CAGR window: FY15–FY25 (10-year), not 5-year.

11. Sources

• [S1] Press Release — "Amidst Continuous Shifts in Trade Policies… India's Equity Markets Exhibited Measured Yet Resilient Performance: Economic Survey 2025-26" — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219998&reg=3&lang=2 — (tier 1)
• [S2] Economic Survey 2025-26 portal — https://www.pib.gov.in/economicsurvey/2026/en/index.aspx?reg=3&lang=2 — (tier 1)
• [S3] Economic Survey — Monetary and Financial Sector Developments chapter (indiabudget.gov.in) — https://www.indiabudget.gov.in/budget2025-26/economicsurvey/doc/eschapter/echap02.pdf — (tier 1)
• [S4] Economic Survey 2025-26 Highlights (PIB) — https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219907&reg=3&lang=2 — (tier 1)