At the end of this year, as I sit to reflect on the year gone by, I can summarise that the chat around the year was about “GPT”. Now, you will be excused if you thought I was referring to the big-time arrival of AI in our lives this year. AI has started making its presence felt more than ever before in businesses and lives. For all those who were looking for “material” and “substantial” use cases since the launch of ChatGPT in November 2022, 2025 provided quite a few answers. What and Why about AI have been replaced by How, When and Where. However, what I am referring to as “chat around GPT” was what dominated the chatter in India the most in 2025.
G for GDP:
I am using GDP as a metaphor for the economy. In 2025, the Indian economy was talked about for all the right reasons. Even the sceptics began to admit that this government was doing something right as far as the economy was concerned. After all, for the past 3/4 quarters, actual GDP figures have beaten all estimates and consistently surprised the pundits. Sanctions on Russian oil purchases, escalations in the Middle East, a full-blown war-like situation with Pakistan, and Trump’s high tariffs on Indian imports – there has been no shortage of challenges on the geopolitical front for India. Yet, amidst all this, achieving growth rates of 7.4%, 7.8%, and 8.2% in the last 3 quarters of 2025 is no mean achievement. We have seen in the past that high economic growth has been accompanied by high inflation. However, this year, that was not the case. In October 2025, India achieved a historically low inflation rate of 0.25%, again surprising pundits and naysayers.
India emerged as one of the fastest-growing large economies in the world. This strong performance was a boost for the government on multiple fronts. It could take the bold step of rationalising the multiple GST rates and aligning them on the lower side, thereby bringing down the prices of goods. It could give income tax relief to the salaried class in the last budget. The RBI could reduce interest rates, making commercial and retail lending much cheaper. The strong performance has also given the Government confidence and headroom to unleash the reforms currently underway.
I have maintained that this government has not been given sufficient credit for quietly managing the economy effectively for many years. It is only now that experts in India and abroad have grudgingly come around to accepting that the government has done a few things right. Of course, we still see some experts questioning whether the GDP data is correct. The same people didn’t question the methodology when the GDP fell by 28% in a quarter during Covid! The fact is, we are entering the new year on a much stronger footing than in the past few years, and 2025 may very well be the year when the “Goldilocks moment” prediction for the Indian economy comes true.
P for Pakistan:
Since 2019, Pakistan had actually vanished from the collective consciousness of all of us. It made a comeback after the terrorist attack on innocent tourists at Pahalgam this summer. India retaliated with a strong response not seen hitherto, attacking terrorist targets deep inside Pakistan. When Pakistan counterattacked, we went a step further, destroying their air bases and inflicting severe damage on their defence establishments in a swift and coordinated operation named Operation Sindoor. Ever since, Pakistan has been back in our chatter.
After the military operation, Pakistan dominated our mindshare in the few ICC cricket tournaments that followed. We defeated Pakistan in the group stage of the ICC ODI Champions Trophy. India went on to win the trophy. In the T20 Asia Cup that followed, Pakistan suffered three embarrassing successive defeats at our hands, including the final.
Finally, in the first week of December, Dhurandhar, a mainstream Bollywood film, was released. The film, part 1 of a solid spy-thriller drama set in Pakistan, has once again drawn attention to Pakistan and India for all the wrong reasons. The film, partly based on real events and real characters, sheds light on some of the heinous cross-border acts of terrorism by Pakistan against India and on how an Indian spy infiltrates the gang lord network there. Since the Pahalgam attack and the Operation Sindoor that followed, Pakistan has remained under continuous attention and focus in India.
T for Trump:
In January 2025, Donald Trump took office as President of the US for a second term. Initially, it was all hunky-dory for India, but the relationship soon went south. There has hardly been a day or a week when Trump hasn’t ruffled feathers in India. Whether it was tariff threats, his repeated assertions about mediating peace between India and Pakistan, his open benevolence toward Pakistan, threats over India’s purchase of Russian oil, or vacillation over signing the trade deal with India, Trump has kept policymakers, commentators, and industry in India occupied. It is only in the past few weeks that we have seen some quiet on the Trump front as far as India is concerned.
Therefore, 2025 has been a year in which India managed to perform well on the economic front despite geopolitical headwinds. It is said that India manages to constantly surprise both the pessimists and the optimists. Let the pessimists prevail.
On that note, wishing you a self-gratifying year!
Image credit: Chat GPT
What a way to explain Chat GPT? Really relevant!
Thanks for the quick comment, Raman!