Overview 2025: This year was exceptional for the Indian economy as these 6 factors accelerated growth

New Delhi (The Uttam Hindu): We are in the final stages of 2025, and the new year (2026) is just days away. The year 2025 was a significant one for India's economy. This year saw many changes and new events, impacting the country's development, people's daily lives, and the stock market. Some sectors experienced rapid growth, while others experienced more gradual changes. In this article, we'll examine the six most important factors of 2025 that shaped the country's economy and played a crucial role in its growth.

India will again be ranked among the world's fastest-growing major economies in 2025. The International Monetary Fund (IMF) raised its economic growth forecast for India from 6.7 percent to 6.9 percent for this fiscal year and from 6.5 percent to 6.9 percent for the next fiscal year, citing direct income tax exemptions, liberal monetary policy, GST reforms, and a potential trade deal with the United States.

According to the IMF and RBI, government investment in sectors such as infrastructure, manufacturing, electronics, auto and renewable energy will significantly boost growth in the year 2025.

Furthermore, retail inflation in October 2025 was only 0.25 percent, well below the RBI's 4 percent target. At the December MPC meeting, the RBI reduced the repo rate by 25 basis points to 5.25 percent. This marks the fourth time this year that the central bank has reduced the repo rate, making it easier for people to obtain loans and boosting economic activity.

Furthermore, exports of services such as IT, BPO, consulting, and remote health/education remained strong this year. According to the IMF report, strong service exports and remittances helped maintain the current account balance, despite uncertainty regarding energy prices and tariffs.

From October 2024 to September 2025, 86 IPOs raised approximately ₹1.71 lakh crore, nearly double the previous year. New listings were largely oversubscribed and delivered returns nearly four times better than the Nifty. This was driven by domestic investors, mutual funds, and retail investment.

While foreign investment remained volatile during this period, domestic investors played a key role in keeping the Indian stock market strong. SIPs, rising demat accounts, and a "buy on dips" mentality bolstered the market.