Plays on India's massive emerging consumer class have kept investors optimistic on the market, but picking the right consumer group is key, Rana Gupta, managing director at Manulife Asset Management, told CNBC.
"If you look at consumption more broadly, you can break it into urban consumption and rural consumption," Gupta told CNBC's Squawk Box. "Rural consumption is not doing great at the moment because the government has reined in the fiscal spending on rural areas… [and] agri-commodity prices globally have fallen so therefore rural growth is moderating."
India's rural areas have suffered three bad monsoon years, the Economic Times reported last month, and sales of motorcycles and tractors, which are bought mainly by rural residents, have fallen. India's Finance Minister Arun Jaitley said last week that India's economic growth could rise to 8 percent this fiscal year if rural demand could be raised, compared with expectations for around 7-7.5 percent growth, the Economic Times reported.
But while rural consumers aren't feeling flush, urban consumers are, Gupta said.