This piece could serve as a quick record of the 8-10 key events of 2025, and the impact on India…with some analysis of the events.

The world had entered the calendar year 2025 with 4-5 key events going on :

1. Wars in Ukraine and Gaza
2. The AI juggernaut moving from testing to scaling phase
3. Climate Change continuing on its spiral of doom
4. Impending set of changes in US economy and society with a new Presidentship around the corner.

Of these, clearly, the double tsunami of AI and Climate Change were supposed to be the once-in-a-century transformations, and the other two were thought of urgent now, but perhaps not as significant in the long term.

India had a few more things coming its way at the beginning of the year :

1. A slightly slowing economy in 2024 (6.5%, 5.6%, 6.4% in Jun, Sep, Dec 2024 quarters), with fingers crossed for the direction it would take
2. Elections in Bihar, and whether the Centre would consolidate or start giving way; after Maharashtra elections of end 2024 had given BJP a whopping majority
3. The continuing GCC boom, and spurring of service exports because of this
4. Impact of AI on Tech Services (and even on GCCs) – Big Tech services companies had already started cutting jobs in 2024.

US Presidentship and the global roller coaster

And what a roller coaster 2025 was! Very few people would have predicted that of all the eight changes listed above – four global and four local – the new US presidentship would upstage all the others and race to the top of any list of the most impactful events of 2025!! With ramifications and reverberations and in some cases, repercussions felt in almost all corners of the world!

To be fair to him, President Trump actually fulfilled most of his election promises, which many analysts thought had been only lip service for wooing the electorate and for winning the elections. At the end of 2025, with the benefit of hindsight and perspective, the 3-4 most significant moves that Trump carried out were:

1. The international tariffs levied on almost 100 countries around the world, ostensibly to even out trade between USA and each country. This move significantly impacted conventional trade arrangements, and manufacturing agreements made over the past 75 years, and more so over the past 20-30 years at least. This changed the so-called world order, carefully built each year since the demise of the USSR.
2.  Making USA walk away from humanitarian funding through charity funds and organizations, potentially impacting the bottom 10% of the 7bn population of the world
3. The frontal attack on DEI, same gender orientation and other such non-conventional societal arrangements; attack on Ivy league universities and the way they were being run (with a strong left liberal orientation, with significant sections having an anti-Israel view).
4. Mass deportation of illegal migrants, and various curbs on future legal migration too
5. The leadership’s attack on liberal policies of Europe, and walking away from alliances, the chief one being NATO’s stand on Ukraine.

India, faced the short end of the stick on tariffs, being the country with the single highest tariffs of 50% levied on many Indian exports. This continues since Aug 2025, and its been 5 months so far, with some signs of reduction perhaps in early 2026. Thousands of exporters of textile and shrimp still face an uncertain future, with more than 50% of their exports historically going to the USA. While total impact on Indian GDP is less, number of people impacted could go into a few millions.

Another area where India is facing the full impact of USA policies is in F1 and H1B visas for Indian students and job-seekers. Rules have become stringent in this legal migration of high-potential migrants. The significant depth of tech and financial markets in USA still make it a destination of choice, but toughening rules will make students and job-seekers look elsewhere – countries like Germany, Australia perhaps.  

The final impact on India has been the sinking realization that “there is no new world order”! It’s each country on their own, and relationships replaced with tactical arrangements. Hence, India has started a series of programs designed to increase self-reliance, be it in manufacturing chips to manufacturing defence equipment, to developing LLM Models.

None of the above impacts and counter-measures had been envisaged at the beginning of the year, no ?

The two, er…three wars

By Nov 2025, Trump pulled a rabbit out of his hat by pushing Israel to come to a truce in Gaza. Hamas and Gaza were being pounded unilaterally by Israel. This was a huge achievement!

At the year-end, there is some progress on getting Russia and Ukraine to also come to the table.

India enjoyed buying cheap oil from Russia in 2023 and 2024, which attracted the ire of Trump and imposition of the additional 25% tariff on India.

What was not predicted at beginning of 2025 was an India-Pakistan war in May 2025!!! This was the shortest ever altercation, and was initiated by India, after a dastardly terrorist attack in Kashmir. India carried out surgical strikes on Jaish-e-Mohammed training centres and on some nuclear enriching sites. Pakistan quickly came to the table, and peace was agreed upon by both parties. India came out of this with a strong positioning that future such terror attacks will be dealt with by counter-attacks inside Pakistani territory.

The Indian economy

The GDP of India saw three consecutive quarters of growth to reach a high of 8.2% in the July-Sep quarter, from the 5-6% about a year back (7.4%, 7.8% in the first two quarters of 2025). Part of this was spurred by a strategic restructuring of the GST structure, which released funds in the hands of the people. Another factor was an acceleration in infrastructure investment by the Govt. Most of the larger states have smooth highways interconnecting their cities. Mumbai, one of the two largest cities of India is seeing a re-building of the city itself – both infra and real estate. International business scholars need to visit these cities to see the buzz. The 20s are roaring, and coincidentally exactly a century after the American roaring 20s.

Inflation is under control (5% CPI at beginning of year falling to 1-2% now), forex reserves are at an all-time high (USD 690bn, up from USD625bn at start of 2025) . The Govt has adopted a Chaebol/Keriretsu model of growth, with a few private groups being chosen for leading the bold big projects. It’s a combination of policies from USA, China, Korea and Japan at play.

Bihar elections

Bihar elections repeated Maharashtra results, in giving BJP and their local partner (one Shive Sena in Maharashtra and JDU in Bihar) a thumping victory, and the Cong-led alliance a whacking defeat. The good part about Indian elections nowadays is that they are a blip in the events radar and the new Govt is back to business soon after elections.

The global march of AI…and GCCs in India

Generative AI became Agentic AI, and Agents moved from Proofs-of-concept to full-fledged Enterprise AI applications. The investment into compute and LLMs (the foundation layer) scaled up into several trillions of dollars, largely by the Top 7 companies in this space. Thousands of AI firms built the middle-ware for the AI hierarchy. And tens of thousands of companies built Vertical-focused applications in the top layer of the AI structure. Perhaps, investments were distributed as 70:10:20 across the three layers, whereas number of companies building AI would be in the proportion of 10:20:70 across these layers.

Towards the end of the year, there were many articles on AI bubble vs AI boom, and we will see what happens in 2026. Whichever way the industry goes, the impact on global economy will be unprecedented. Even after a bubble burst.

India had its own story going in parallel. The IT services giants – TCS, Infosys, Wipro, HCL had been servicing global MNCs with GCC-as-a-service, and GCCs in India were shooting up, almost a 35% CAGR in the past 2-3 years. 2025 saw this trend continue, with GCCs going to 1900 from 1650 at beginning of the year, almost one new GCC being set up a day!

It’s the end-to-end thinking on marriage of GCCs and AI which raises a few “Cassandric” questions. If AI indeed achieves its promise of automating most of the frontline white collar jobs, which ironically are lots of jobs in the GCCs, this may impact this part of Indian economy. The next 3-4 years are a wait-and-watch period.

Big Tech services firms in India continue to reduce manpower, a disastrous news for the 1mn+ new engineering graduates passing out each year. However, the Global BigTech firms (FANGAM companies – Meta, Apple, Google, Amazon, Microsoft, Nvidia) have been hiring well in India in 2025, but they collectively have a much smaller employee count as compared to the Indian Tech Services companies.

Climate change : 2025 saw many months at 1.5 deg C above pre-industrial levels, meaning thayt climate change continued to worsen. However, President Trump withdrew USA from the Paris Agreement on the first day of his office, and is following a policy of energy dominance through fossil fuels, and a systematic rollback of many regulations from the earlier administration.

So all in all, 2025 was a very interesting year with multiple world-scale events rocking the stage and perhaps walking themselves into the annals of history. We may hope for 2026 to be a less eventful year perhaps – too much excitement is also not great! 😉.