India's Free Trade Agreements Could Boost GDP By $170 Billion By 2035

India's expanding network of free trade agreements (FTAs) could increase its gross domestic product (GDP) by $140 billion to $170 billion by 2035, according to a Bloomberg Economics report.

The report suggested that stronger trade partnerships could help India withstand higher American tariffs while encouraging exports, foreign investment and productivity growth.

Existing agreements are projected to raise GDP by 1.2% above the baseline by 2035.

Implementation of agreements with the European Union (EU) and New Zealand from 2027 could increase the gain to 1.7%, equivalent to approximately $140 billion at constant 2025 dollar values.

FTAs Could Lift GDP By 2.1%

Bloomberg Economics estimated that a trade agreement with the US could contribute another 0.2 percentage points to India's GDP.

Successful negotiations with the Eurasian Economic Union (EAEU), Gulf Cooperation Council (GCC) and Israel could add a further 0.2 percentage points.

Together, these developments could lift economic output by 2.1%, or approximately $170 billion, by 2035.

Commerce and Industry Minister Piyush Goyal recently said India was negotiating agreements with eight to nine additional countries or groups representing approximately $15 trillion in combined GDP.

He said India had concluded nine FTAs covering 38 developed countries and economies worth $60 trillion over the previous four-and-a-half years.

The report projected trade volumes, including imports, could increase approximately 10% by 2035 compared with 2024.

US Tariffs May Have Limited Impact

Bloomberg Economics estimated that average US tariffs on Indian goods had increased from 2.4% in 2024 to 11.6%.

Although these duties could reduce Indian merchandise exports to America by approximately 20% by 2035, the report anticipated a negligible overall GDP impact.

It noted that less than 2% of India's economic output depended on US markets.

India's GDP growth was projected at 6.9% in 2026 and 7.4% in 2027, while inflation could reach 4.5% and 5.3%, respectively.

The report forecast the repo rate at 5.50% in 2026 and 5.75% in 2027.

It also estimated that artificial intelligence (AI) could increase annual GDP growth by 0.4 to 0.9 percentage points through productivity improvements, despite increasingly concentrated global capital flows.