From US tariffs to GST rationalisation: 11 key events that captured investors' eyes in 2025

From Trump tariffs and trade wars to a rally in precious metals and India becoming the fourth-largest economy in the world, the 2025 season has been a rollercoaster. Let’s look at some events that captured the investors’ eyes and inadvertently impacted the numbers in their portfolios.

US Tariffs

First announced on April 2, US President Donald Trump’s reciprocal tariffs swept the world in a move dubbed “Liberation Day”.

President Donald Trump had announced a baseline 10% tariff on imports coming into the US, along with additional country-specific reciprocal tariffs in the range of 11% to 50%.

The US initially imposed a reciprocal tariff of 25% on India, in addition to a baseline tariff of 10%. In August, it imposed an additional 25% tariff as a penalty for continued purchase of Russian oil. India and the US are in the midst of negotiating a trade agreement.

Another notable tariff rate was imposed on China at 24%, which was later revised to 125% for some Chinese imports. This led to China retaliating by introducing an 84% tariff on US imports, which was subsequently raised to 125%. This led to an all-out trade war between the two countries. However, both nations reached an agreement to reduce tariffs. According to Oxford Economics, the effective tariff rate on Chinese goods entering the US stood at 29.3% in November 2025.

China’s rare earth export ban

China introduced two waves of export controls for rare-earth elements (REEs) in April and October 2025, respectively, in response to US tariffs and citing national security interests as a reason.

In April, in response to the US’s liberation day tariffs, China introduced export license requirements on seven medium and heavy REEs (Samarium, Gadolinium, Terbium, Dysprosium, Lutetium, Scandium and Yttrium).

As US-China trade tensions escalated, the latter imposed a second wave of export control on five REEs (Holmium, Erbium, Thulium, Europium and Ytterbium). However, the second ban was temporarily suspended until November 2026 as part of a trade truce with the US.

Investors eyed these events with caution, as China controls 60% of global REE production and 90% of its refining, and is central to the global REE supply chain. To put it into perspective, India imported about 93% of its rare earth magnets from China in FY25. However, in late October, China resumed shipment of heavy rare earth magnets to India after six months of uncertainty.

Gold bonanza

This year, gold rallied by nearly 70%, hitting over 50 record highs as investors shifted to safer assets due to global instability, US tariff concerns, recession fears, currency weakness, and other factors that created uncertainty in the markets.

Domestically, on the Multi-Commodity Exchange (MCX), gold futures (for February expiry) surged to an all-time high of ₹1,35,496 per 10 grams on December 15, tracking gains in the global market, along with a weak rupee.

In the international market, Comex gold crossed the historic $4,000 per ounce mark on October 8 and the $4,300 per ounce level later in the same month. According to multiple media reports, gold futures are on track to rally past the $4,400 per ounce mark before the end of the year.

Silver rally

Silver has surged nearly 125% in 2025, both domestically and internationally, primarily driven by supply shortages and rising industrial demand.

On December 12, silver futures soared past the historic ₹2 lakh per kilogram, hitting a lifetime high of ₹2,01,615 per kg (March expiry) on the MCX. Globally, Comex silver breached the $65-per-ounce mark for the first time in December.

India’s GDP

In 2025, India surpassed the $4 trillion mark in gross domestic product (GDP), becoming the fourth-largest economy in the world, overtaking Japan. The country is projected to become the third-largest economy, surpassing Germany by 2028.

According to government data, the country’s real GDP grew 8.2% in the second quarter of FY26, accelerating from 5.6% in the same period a year ago. At the same time, its nominal GDP growth was 8.7%.

Additionally, Fitch Ratings raised India's GDP growth forecast for the current fiscal year to 7.4%, from 6.9%, on increased consumer spending and improved sentiment boosted by GST reforms.

Rate cuts across the globe

Most central banks worldwide opted for rate cuts in 2025. In February, the Reserve Bank of India (RBI) slashed the repo rate by 25 basis points (bps) for the first time in five years. The RBI’s six-member Monetary Policy Committee (MPC) cut the repo rate by a quarter point to 5.25% for the fourth consecutive time this year. With December’s reduction, the committee has now delivered a cumulative 125 basis points of rate cuts in the current fiscal year.

The US Federal Reserve delivered an interest rate cut in September, its first since the end of last year. In December, the Fed slashed its key interest rate by 25 bps for the third consecutive meeting this year, bringing the lending rate to the 3.50% to 3.75% range.

India-UK FTA

Investors had their eyes glued to the screen as India and the UK signed a landmark free trade agreement in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer in July.

The India-UK FTA encompasses strategic agreements, tariffs and trade (import & export), investments (FDI), innovation, technology, regulations, financial services, taxation for residents in only one country, etc.

India is currently on the negotiating table for a trade deal with the United States, the European Union, Canada, the Southern African Customs Union, Oman, Peru, Chile, New Zealand, Israel and more.

Rupee free fall

The rupee has been in a free fall this year, declining more than 5% against the US dollar in 2025. It is also one of the worst-performing currencies in Asia.

It breached the psychological 90/$ mark in December. The rupee, on December 15, slid to a lifetime low of about 90.75 against the dollar, driven by a multitude of factors, including a widening trade deficit, a delay in a trade deal with the United States, and persistent foreign outflows, among others.

GST rate cuts

In early September, the GST Council approved a two-tier rate structure of 5% and 18% and the changes were implemented from September 22 onwards.

The GST tax rates on common-use items, from hair oil to corn flakes, TVs, and personal health and life insurance policies, were slashed. Furthermore, almost all personal-use items saw rate cuts.

According to media reports, citing an SBI research report, the massive GST rationalisation caused an approximate 25 basis point (bps) reduction in the Consumer Price Index (CPI) or retail inflation in the September-November 2025 period.

Persistent FII outflows

2025 is turning out to be the worst year for foreign investment in Indian equity markets, as foreign institutional investors (FIIs) sold record shares worth ₹1.6 lakh crore, data compiled by the National Securities Depository Limited (NSDL) showed.

FIIs began selling Indian stocks in October 2024, and the trend continued to accelerate in the following months, with only brief periods of buying. Foreign portfolio investor (FPI) ownership in Indian equity markets fell further to 16.9% in the second quarter of FY26, marking the lowest level in 15 years, according to a report by the National Stock Exchange.

India’s retail inflation at record low

India’s retail inflation eased sharply to 0.25% in October, its lowest level since the introduction of the current Consumer Price Index (CPI) series. In November, it inched up to 0.71%.

Furthermore, for the first time since the adoption of Flexible Inflation Targeting (FIT) in 2016, average headline inflation for a quarter stood at 1.7% in Q2 of 2025-26, breaching the lower tolerance threshold (2%) of the inflation target (4%). It dipped further to a mere 0.3% in October 2025, an all-time low.