As the year 2025 draws to a close, India's economic performance stands out as a beacon of resilience in a world rattled by unpredictable tariffs, persistent wars, and the disruptive force of artificial intelligence. While public policy responses were sharp and effective, a critical question looms for the new year: why was Corporate India largely missing in action?
A World in Disruption: Tariffs, Conflict, and AI Hype
The global landscape in 2025 was dominated by three major forces. The sharpest shock to the system came from illogical and unilateral tariff impositions by US President Donald Trump, which severely disrupted international trade flows and dampened growth worldwide. This economic friction was layered atop ongoing armed conflicts, including the Russia-Ukraine and Israel-Palestine wars, which continued to create geopolitical instability.
Paradoxically, capital markets chose to largely ignore these headwinds, fueled instead by an insatiable zest for artificial intelligence. Traders and investors bet heavily on AI as a transformative productivity tool, anticipating an economic reshaping akin to the advent of electricity or the internet. However, the actual scale of this impending AI-driven boost remains uncertain and debated.
India's Stellar Economic Counterplay
Amid this global turbulence, India's economy demonstrated impressive fortitude. It not only achieved robust growth but also confronted the tariff challenges strategically. India's merchandise and services export receipts climbed by over 5% during the April-November 2025 period, marginally outpacing import growth. This success is a direct result of the government leveraging the trade crisis to overhaul its export strategy, diversifying both products and target markets.
The commerce ministry was notably active, sealing trade deals with the United Kingdom, Oman, and New Zealand. It also fast-tracked negotiations with the European Union and expanded ties with the South American bloc Mercosur. The benefits of earlier pacts with Australia and the European Free Trade Association are also poised to bear fruit. Complementing this external push, the government implemented reforms to reduce the cost of imported inputs for export products, alongside other progressive moves in various policy spheres.
Macroeconomic indicators further underscored this resilience. Both inflation and the value of the Indian rupee saw a decline in 2025, even as consumption activity perked up across several sectors. Supportive monetary policy with low interest rates and the Goods and Services Tax (GST) framework deserve credit for enabling these brighter growth prospects.
The Missing Piece: Corporate India's Hesitation
Despite the favourable environment, the economic expansion remains sub-optimal due to one significant gap: the private sector's continued reluctance to invest. The government has been performing the heavy lifting to foster growth, with private players holding back capital expenditure. This is puzzling, given that most of Corporate India's longstanding demands, including the recent revision of labour codes, have been addressed by policymakers.
The call for 2026 is clear. Private businesses must now shift gears and start investing aggressively within India rather than looking predominantly overseas. Beyond capital, there is a pressing need for corporate India to modernize its governance frameworks. This includes formulating robust plans for emerging challenges like cyber-security, climate action, and social responsibility, as well as ensuring smooth leadership succession.
As the calendar resets for 2026, the moment is ripe for the private sector to renew its commitment to the nation's economy, polity, and society. The resilience shown in 2025 provides a solid foundation, but future growth and global competitiveness hinge on a unified effort where corporate determination matches public policy resolve.
