India's free-trade pact boom could add up to $170 bn to GDP by 2035

Bloomberg Economics released a report forecasting that India's network of free-trade agreements could contribute between $140 bn and $170 bn to its economy by 2035, translating into a 1.2-2.1% increase in GDP. Existing agreements are expected to raise GDP by 1.2%, while implementing the EU and New Zealand accords from 2027 would lift the gain to 1.7%. If negotiations with the Eurasian Economic Union, Gulf Cooperation Council and Israel conclude, the boost could reach 2.1%.

The analysis notes that average US tariffs on Indian goods have risen to 11.6%, which may reduce US-bound exports by roughly 20%, yet the effect on overall GDP is projected to be minimal because US markets represent under 2% of India's output. The report also predicts growth rates of 6.9% in 2026 and 7.4% in 2027, rising inflation, and a modest increase in the central bank’s repo rate. Trade volumes are expected to grow about 10% by 2035, with imports climbing as households and firms gain access to new products and manufacturers become more integrated into global value chains. Additionally, AI is identified as a potential driver of an extra 0.4-0.9 percentage points of annual GDP growth.