New Delhi: India’s free trade agreements (FTAs) already in force, along with those agreed with the European Union (EU) and New Zealand, could add about $140 billion to the country’s gross domestic product () by 2035, lifting economic output by 1.7% and export volumes by 6.2% compared with a baseline without the trade deals, according to a Bloomberg Economics report.
The October 2026 report, titled Silicon, Steel and Statecraft: New Economic Thinking for the New Economy Forum said the projected gain assumes that the agreements with the EU and New Zealand are implemented from 2027. The $140 billion estimate is expressed in constant 2025 US dollars.
The gains could increase to about $170 billion, or 2.1% of GDP, by 2035 if India reaches an interim trade agreement with the US and concludes ongoing negotiations with the Eurasian Economic Union (EAEU), Gulf Cooperation Council (GCC) and Israel over the next few years, the report estimated.
According to Bloomberg Economics, FTAs already in force could increase India’s GDP by 1.2% and export volumes by 4% by 2035, compared with the baseline. The addition of the EU and New Zealand agreements would increase the estimated gains to 1.7% and 6.2%, respectively.
A proposed interim agreement with the US could add another 0.2 percentage point to GDP gains, taking the total to 1.9%, while export volumes could increase by 7.8% compared with the baseline. The conclusion of negotiations with the EAEU, GCC and Israel could raise the projected GDP gain to 2.1% and export volumes to 9.2%.
Based on general equilibrium model
The estimates are based on a computable general equilibrium model developed by the World Trade Organization. The report’s baseline assumes that US tariffs remain at their 2024 levels and none of the trade agreements are implemented.
Bloomberg Economics said that the average US tariff on Indian goods had increased to 11.6% in August 2026 from 2.4% in 2024. It estimated that tariffs at these levels would reduce Indian goods exports to the US by about one-fifth by 2035.
However, the report estimated that the impact on India’s overall GDP would be negligible, as less than 2% of the country’s output depends on US markets and stronger exports elsewhere could cushion the impact.
The report noted that the average US tariff rate across trading partners stood at 10.7% in August, compared with 2.3% in 2024. Tariffs at this level could reduce US goods imports by roughly 15% compared with the previous regime.
The report said that agreements with the European Free Trade Association (EFTA), the and Oman entered into force during 2025-26, adding to agreements with Australia and the United Arab Emirates that took effect in 2022. India also signed an FTA with New Zealand and concluded negotiations with the EU.
Comprehensively modelled
Bloomberg Economics modelled the impact of these agreements through changes in bilateral tariffs, reductions in non-tariff barriers and productivity gains associated with higher foreign direct investment.
For its calculations, the report assumed that India’s trade partners eliminate tariffs on Indian goods in the first year, while India eliminates tariffs on industrial products and halves tariffs on agricultural products over a phased implementation period.
It also assumed that the cost of non-tariff measures on goods and services declines gradually by 25% over 15 years, alongside additional reductions in barriers affecting services.
The model incorporated investment commitments of $100 billion over 15 years under the EFTA agreement, of which roughly $35 billion was expected to be additional, and $20 billion under the New Zealand agreement, almost all of which was expected to be additional.
Beyond trade agreements, the report examined how domestic reforms could increase India’s economic gains.
It estimated that a further improvement in manufacturing efficiency, modelled as a roughly 2% reduction in production costs, could add about 0.5 percentage point to GDP gains and roughly 1 percentage point to export gains by 2035.
The report also highlighted the potential benefits of moving workers from agriculture into manufacturing and services. More than 40% of India’s workforce remains in agriculture, with high underemployment, it said.
A scenario involving higher agricultural productivity, phased in over a decade and allowing workers to move into manufacturing and services, could add about 2 percentage points to GDP gains and slightly more than 1 percentage point to export growth.
Bloomberg Economics said that realising the benefits of FTAs would require effective implementation, continued domestic reforms, reliable access to energy, and advanced technologies, and measures to unlock the potential of India’s workforce.