Year of hope

India must aim to sustain the growth momentum

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History will likely record 2025 as the year the world’s largest economy decided to upend the global trade order built over decades.

The imposition of the so-called reciprocal tariffs by the United States (US) and trade negotiations with individual trading partners created enormous uncertainty and confusion. The impact of the shift in US policies, which will play out over time, will be analysed for years to come. For now, the US economy is doing reasonably well. It is being argued that the artificial intelligence-related investment boom is pushing up growth. India was particularly singled out by the US as President Donald Trump decided to mix trade and geopolitical objectives, without much basis, and hit India with a 50 per cent tariff. Since the US is India’s most important trade partner, the key thing to watch out for this year will be a mutually beneficial trade agreement. In fact, developments on the trade front in 2026 will significantly influence India’s prospects.