India’s expanding network of free trade agreements (FTAs) could add $140-170 billion to its GDP by 2035, according to a report released by Bloomberg Economics on Monday.
“Our analysis suggests FTAs already in force should raise India’s GDP by 1.2 per cent by 2035 relative to baseline, rising to 1.7 per cent if the EU (European Union) and New Zealand agreements are implemented from 2027, a gain of about $140 billion at constant 2025 US dollars,” the report said.
Bloomberg Economics further said a US deal would add 0.2 percentage points, and if negotiations with the Eurasian Economic Union (EAEU), Gulf Cooperation Council (GCC) and Israel conclude over the next few years, the gain could rise by another 0.2 percentage points, leaving GDP 2.1 per cent higher (about $170 billion) by 2035.
The report said the Indian economy is well placed to absorb disruptions from the imposition of American tariffs, as expanding free trade partnerships aid the discovery of new markets, foreign direct investment and productivity gains, while global capital flows become more concentrated.
Bloomberg Economics estimated that the average tariff on Indian goods sold to the US has risen to 11.6 per cent from 2.4 per cent in 2024. “By 2035, we estimate the tariffs will cut Indian goods exports to the US by about one-fifth. But the hit to India’s economy should be limited. Less than 2 per cent of its output relies on US markets, and stronger exports elsewhere should cushion the blow. We estimate the effect on gross domestic product will be negligible,” the report said.
Facing such uncertainty in its single largest export destination amid supply chain disruptions from the West Asian conflict, India is in negotiations with at least eight to nine more groups of countries and individual nations that together account for another $15 trillion of GDP, according to Commerce and Industry Minister Piyush Goyal. India has concluded nine free trade agreements (FTAs) with 38 developed countries in the past four and a half years. These nine agreements cover economies with a combined GDP of $60 trillion and 38 developed countries, Goyal said earlier.
The report projected India’s growth rates for calendar years 2026 and 2027 at 6.9 per cent and 7.4 per cent, respectively. Inflation is projected to rise from 2.2 per cent in 2025 to 4.5 per cent in 2026 and 5.3 per cent in 2027. The central bank’s repo rate is forecast at 5.50 per cent for 2026 and 5.75 per cent in 2027, from 5.25 per cent in 2025.
The report further forecast that trade volumes, including imports, would rise even faster on completion of such agreements, with a rise of around 10 per cent by 2035 over 2024. “Imports would also climb as households and businesses gain access to new products and services, and manufacturers become more integrated into global value chains,” the report said.
However, the report noted that global capital flows are becoming more concentrated and more political, with flows between rival nations estimated to be 40 per cent lower than between allies, as capital zeroes in on artificial intelligence (AI) and semiconductors. The report said AI could boost India’s GDP growth by 0.4–0.9 percentage points annually through higher factor productivity.
