We cannot afford any complacency: Even a new year free of shake-ups would test our resolve

As the sun sets on 2025 and the calendar gets reset for 2026, it might be worthwhile to take a moment to reflect upon what whizzed past as a means of getting a better handle on what awaits us. Two big-picture events and one big technology trend monopolized headlines over the past year.

The sharpest dissonance was caused by US President Donald Trump’s illogical and unilateral tariff impositions against a host of countries that disrupted global trade flows and dampened growth impulses.

This came on top of existing geopolitical frictions that had erupted into armed conflicts: Russia-Ukraine and Israel-Palestine, among others.

But capital markets shrugged all this off in their zest for artificial intelligence (AI), a productivity tool that bullish traders expect will reshape the economy—like how electricity and the internet did—and enable significantly faster growth in the near future.

The jury is still out on the scale of any such AI boost, however.

It must be said that India has shown remarkable resilience amid global turbulence. The economy managed to not only notch up impressive growth, but also meet its tariff challenge head-on.

India’s merchandise plus services export receipts went up by over 5% during April-November 2025, marginally higher than import growth over the same period. This is reflective of how the government leveraged the trade crisis to overhaul its export strategy, both in terms of products and markets.

Over the past year, the commerce ministry sealed trade deals with the UK, Oman and New Zealand, fast-tracked one with the EU and expanded ties with Mercosur. We can also expect the early harvests of pacts signed earlier with Australia and the European Free Trade Association.

The broad gains of all this should show up in GDP data. The government also reformed some aspects of import policy that were keeping inputs for export products costly. Reformist moves were made in many other spheres too.

Both inflation and the rupee dropped in 2025, even as consumption perked up in many sectors. Of course, monetary and fiscal enablers—such as low rates of interest and GST—deserve macro-level credit for brightening the economy’s growth prospects.

Yet, we must also point out that it was not all hunky-dory. The private sector has been largely missing from the action, with the government still doing the heavy lifting to foster growth. With private players holding back investment, the economy’s expansion remains sub-optimal.

Oddly, most of Corporate India’s demands have been met, with a revision of labour codes just the latest to ease long-cited bugbears. Private businesses must now start investing at home rather than overseas.

They should also update their governance systems to improve plans for everything from cyber-security and climate action to social responsibility and succession. It might be time for the private sector to renew its commitment to our economy, polity and society.

We began with a song and it might be appropriate to end with another, this time from the indie rock band Death Cab for Cutie: So this is the new year/ And I have no resolutions/ Or self-assigned penance/ For problems with easy solutions.