How India's economy defied odds in 2025 — but external shocks left a mark

India's economy continued to grow strongly in 2025, achieving an impressive 8.2% GDP growth rate for the second quarter of the fiscal year. The Reserve Bank of India (RBI) cited a "rare goldilocks" phase with low inflation and robust growth. The government implemented GST 2.0, simplifying indirect taxes, and provided income tax relief to middle-class earners. India also signed several free trade agreements, including with New Zealand, Oman, and the UK, aiming to diversify its export markets. However, currency volatility and rising global uncertainty posed challenges. The Indian rupee faced pressure due to dollar strength, while tariffs on Indian exports to the US intensified.