India’s economy showed remarkable resilience in 2025, growing strongly even as external shocks tested global markets. According to official data, India registered an impressive GDP expansion of roughly 8.2 per cent, reflecting robust performance despite headwinds such as trade tensions, currency pressure and capital outflows that affected many emerging economies. Domestic momentum was bolstered by a series of proactive policy measures — including monetary easing through repo rate cuts by the Reserve Bank of India, a simplified GST regime, and a pro-middle-class fiscal budget — which helped sustain demand, investment and business confidence.

However, external factors left their mark. Global trade frictions and high tariffs on exports created uncertainty for Indian manufacturers seeking export markets, slowing export growth in affected sectors. The Indian rupee also faced pressure against a stronger dollar, partly driven by global capital flows and safe-haven demand, while foreign institutional investors recorded significant outflows during parts of the year. Progress in key trade negotiations, such as with the United States, also remained slower than expected, adding to external unpredictability.

Despite these challenges, domestic consumption — especially in services and retail — remained a critical growth engine, supported by strong private spending and employment trends. India’s focus on diversifying trade partnerships and strengthening internal demand helped buffer the economy from global shocks, underscoring the importance of resilient domestic fundamentals as the country navigates an uncertain global economic landscape.