India’s expanding network of free trade agreements (FTAs) could add around $140 billion to its gross domestic product (GDP) by 2035 and increase exports by 6.2%, according to a report by Bloomberg Economics.
The report said the agreements could help India access new markets, lower import costs, attract foreign direct investment (FDI) and improve productivity as countries increasingly diversify supply chains and seek preferential access to overseas markets.
“Using a large-scale model of the global economy developed by the World Trade Organisation, we estimate these agreements could add about $140 billion to India’s GDP in 2035, opening new markets, cutting import costs, fostering foreign direct investment and lifting productivity,” said the Bloomberg report.
“We also consider two scenarios that could amplify the gains: realising further productivity benefits from a decade of reforms to strengthen manufacturing competitiveness, and enacting policies that help underemployed agricultural workers transition into manufacturing and services,” the report added.
Rising US tariffs accelerate global trade realignment
The expansion of India’s trade network comes as rising US tariffs reshape global trade flows. Since President Donald Trump returned to the White House in January 2025, the United States has increased tariffs on several trading partners and product categories.
According to Bloomberg Economics, the average US tariff rate stood at 10.7% in August, compared with 2.3% in 2024. The increase reflected sector-specific duties, particularly on automobiles and metals, as well as country-specific levies.
The report said tariffs at these levels could reduce US imports of goods by around 15% compared with the previous regime. Further increases remain possible amid continuing tariff threats and investigations.
In response, economies are seeking to diversify their trade relationships and accelerate negotiations with new partners, creating opportunities for countries that can secure preferential market access.
India expands trade partnerships across major markets
India has accelerated its FTA programme after years of relative caution. During 2025-26, agreements with the European Free Trade Association (EFTA), the United Kingdom and Oman entered into force, adding to trade agreements with Australia and the United Arab Emirates that took effect in 2022.
India also signed an FTA with New Zealand and concluded negotiations on a trade agreement with the European Union. New Delhi is pursuing additional partnerships, including with the Eurasian Economic Union, and has sought an agreement with the Gulf Cooperation Council.
Other major economies are following a similar approach. The European Union has signed new or updated agreements with Mercosur and Mexico and concluded negotiations with Indonesia, India and Australia. The Association of Southeast Asian Nations and China signed an upgraded free trade agreement in October 2025, while Canada has also pursued several trade agreements.
US-India trade negotiations remain important
Despite expanding its trade links elsewhere, India has continued efforts to deepen economic ties with the United States.
President Trump and Prime Minister Narendra Modi announced plans for a bilateral trade agreement in February 2025. However, negotiations have taken place against a backdrop of tariff tensions.
In the second half of 2025, India faced some of the highest additional US tariffs among its major trading partners after Washington imposed a 25% reciprocal tariff and an additional 25% duty on purchases of Russian oil.
Bloomberg Economics’ estimates suggest that India’s expanding trade agreements could support long-term growth by improving market access and strengthening its position in global supply chains. The extent of the benefits will also depend on domestic reforms, manufacturing competitiveness and the ability to shift workers into higher-productivity sectors.