India’s FTA Push Could Add US$ 170 Billion To GDP By 2035
India’s expanding free trade agreement network could lift its gross domestic product by as much as US$ 170 billion by 2035, helping exporters diversify markets and cushioning the impact of higher US tariffs, according to Bloomberg Economics.
The report estimates that agreements already in force could raise India’s GDP by 1.2% above its baseline projection by 2035. The gain could increase to 1.7%, equivalent to around US$ 140 billion at constant 2025 US dollars, if agreements with the European Union and New Zealand take effect from 2027.
A trade agreement with the United States could contribute another 0.2 percentage points. Completing negotiations with the Eurasian Economic Union, Gulf Cooperation Council and Israel could deliver a further increase of the same magnitude, taking the overall GDP gain to 2.1%, or approximately US$ 170 billion.
Bloomberg Economics said wider market access, stronger foreign direct investment and productivity improvements would help India manage trade disruptions. These benefits could become increasingly valuable as geopolitical tensions reshape supply chains and cross-border investment.
The report estimates that the average tariff on Indian goods entering the US has increased to 11.6% from 2.4% in 2024. These duties could reduce India’s goods exports to the American market by around one-fifth by 2035.
However, the broader economic impact is expected to be negligible, as less than 2% of India’s output depends on US markets. Increased exports to other destinations could offset much of the pressure, the report said.
India is pursuing additional trade partnerships as uncertainty persists in its largest export market and the West Asian conflict disrupts supply chains. According to Commerce and Industry Minister Piyush Goyal, negotiations are underway with eight to nine countries or groups representing a combined GDP of around US$ 15 trillion.
Goyal had earlier said India concluded nine FTAs covering 38 developed countries over the past four and a half years, providing access to economies with a combined GDP of US$ 60 trillion.
The report projects that completing the agreements could increase trade volumes, including imports, by around 10% by 2035 compared with 2024. Greater access to overseas products and services would support imports, while manufacturers could become more closely integrated into global value chains.
Bloomberg Economics forecasts India’s economic growth at 6.9% in calendar 2026 and 7.4% in 2027. Inflation is projected to rise from 2.2% in 2025 to 4.5% in 2026 and 5.3% in 2027. The RBI’s repo rate is forecast at 5.50% in 2026 and 5.75% in 2027, compared with 5.25% in 2025.
The outlook also highlights a more selective global investment environment. Capital flows between geopolitical rivals are estimated to be 40% lower than those between allies, with investment increasingly concentrated in artificial intelligence and semiconductors.
For India, artificial intelligence could provide an additional growth driver. The report estimates that productivity improvements linked to AI could add 0.4–0.9 percentage points to annual GDP growth.
