India must prepare now for big economic changes in 2025

India is walking into 2025 like someone who just realized their house is built on quicksand. The global economy is changing, and the country’s biggest trade partners and investors are holding all the cards. If it doesn’t play this right, things could go downhill fast.

The big shock? Donald Trump is getting back in the White House, and his trade policies are set to wreck the $24 trillion global goods trade and the $7.5 trillion services market. For India, that’s bad news.

The U.S. is India’s biggest export market, taking 20% of everything from mobile phones to services from global capability centers. Now, Trump isn’t one to care about old alliances. His approach to trade is simple: America first, everyone else last.

He’s already talking about the H1-B visa system, which has Indian professionals in his sights. The visa drama has spilled into social media, turning the debate into a mud-slinging fest. If Trump tightens the screws on visas, India’s tech industry will feel it, and fast.

Foreign investment drops, billionaires prepare for battle

The money flowing into India is drying up, and it’s happening at the worst possible time. In the first half of FY25, foreign direct and portfolio investments dropped by half compared to last year. That’s brutal for startups and public companies that need equity funds to survive.

Let’s break it down. In 2024, India’s stock market managed a 9% gain. Sounds decent, right? Wrong. The U.S. S&P 500 soared by 24%, and Hong Kong and Japan’s markets all did better.

The private equity deals didn’t do any better. The country saw 74 big deals worth $20.7 billion in 2024. Compare that to 2023’s 75 deals worth $23.2 billion, and you see the problem.

But while foreign investors are pulling out, local billionaires are preparing for some serious turf wars. Elon Musk is going into India’s satellite broadband market, and he’s up against Mukesh Ambani, Sunil Mittal, and Kumar Mangalam Birla. That’s a heavyweight fight if there ever was one.

Crypto is booming, but the rules are brutal

If there’s one thing India’s nailing right now, it’s crypto adoption. The country is leading the world in crypto usage for the second year in a row. That’s impressive, considering the government has thrown everything at investors, from high taxes to strict regulations.

Between June 2023 and July 2024, India dominated decentralized finance transactions under $10,000, according to Chainalysis. The country’s Financial Intelligence Unit (FIU) slapped fines on nine offshore crypto exchanges in December 2023 for breaking local rules.

Binance got hit with a 188.2 million rupee ($2.25 million) penalty in June, just a month after registering with the FIU. KuCoin didn’t escape either, getting fined 3.45 million rupees in March. Still though, India’s market is expected to only get more active from here.

Perhaps the government would like to consider that when evaluating economic policies, especially with Trump’s upcoming national Bitcoin strategic reserve.