Archive · 4 Jan 2026
India Faces Challenges in 2025
In 2025, India faced several challenges.
The US raised tariffs, which affected India's exports.
However, India started selling more to other countries, which helped a bit.
The rupee's value was unstable, and there were concerns about money coming into the country.
The US and China were competing over AI and important minerals, which could cause problems.
Despite these issues, India is trying to make new trade deals and work with different countries.
The new year might be better, but there are still things to worry about, like managing AI and protecting the environment.
US raised average tariffs to 18% (50% on India), impacting India's exports.
India's exports to the US fell 21% between May and November 2025, but exports to other destinations rose 5.5%.
Rupee volatility and unreliable capital inflows pose risks to India's economic stability.
Global trade dynamics are shifting, with a focus on AI and critical minerals.
India is negotiating trade deals and broadening partnerships to secure favorable terms.
- Who
- India and the global community
- What
- Facing economic and geopolitical challenges in 2025
- When
- Throughout 2025
- Where
- Globally, with a focus on India and the US
- Why
- Due to shifting global trade dynamics, US trade policies, and the impact of AI and critical minerals
Optimistic View
Pessimistic View
Economic Resilience
Optimistic View
India's economy is well-prepared to weather global shocks, with diversification of exports and potential for growth.
Pessimistic View
Rupee volatility and unreliable capital inflows pose significant risks to economic stability.
Global Trade
Optimistic View
India is negotiating trade deals and broadening partnerships to secure favorable terms.
Pessimistic View
US tariffs and trade policies could negatively impact India's exports and economic growth.
AI and Critical Minerals
Optimistic View
India can leverage AI and secure critical minerals to enhance its global standing.
Pessimistic View
The global scramble for critical minerals and AI dominance could lead to market instability and geopolitical tensions.
- US Tariffs
- Average US tariffs raised from 2% to 18% (50% on India)
- US Inflation
- 2.7% as of November 2025, with potential for increase
- India's Exports
- Exports to the US fell 21% between May and November 2025, while exports to other destinations rose 5.5%
- Rupee Volatility
- A concern for India's economic stability
- Capital Inflows
- Unreliable in 2025, but expected to ease in 2026
- AI and Critical Minerals
- Key factors shaping global trade and geopolitics
- Global Value Chains
- Shift from outsourcing to near-shoring
- Free Trade Pacts
- Becoming essential for securing predictable trade terms
