Bloomberg Economics projects that a broader web of free trade deals under India's belt could lift the country's gross domestic product by roughly $140 billion and push export volumes up by 6.2% before 2035. A WTO global-economy model cited in the Bloomberg analysis put the combined uplift from those trade agreements at roughly $140 billion added to India's gross domestic product by 2035, with gains flowing through expanded export access, reduced costs on incoming goods, greater inflows of foreign capital, and stronger productivity across industries — benefits that the analysis noted would be amplified if a decade of manufacturing reforms translated into deeper competitiveness gains and if policy measures helped workers leaving underemployed agricultural roles move into manufacturing and services.
Broader commercial ties for India are taking shape at a moment when higher American tariffs are redirecting the flow of goods across international markets. Tariff rates on a range of trading partners and product categories have been raised by the United States following Donald Trump's return to the presidency in January 2025. Data from Bloomberg Economics put the average US tariff rate at 10.7% as of August, up from 2.3% the previous year.
Tariff-related duties on automobiles and metals, along with levies tied to individual countries, drove the overall uptick. According to the document, duty levels of that magnitude stood to pull American goods imports down by roughly 15% against what had been in place beforehand. Tariff-related probes and ongoing trade disputes leave the door open to additional rounds of price hikes.
Trade relationships are being broadened and fresh partnership talks pushed forward across a range of economies, opening a window for nations able to lock in favourable market terms ahead of others. A push to negotiate more free-trade agreements has gathered pace, marking a departure from the more restrained approach that defined earlier policy.
Three pacts — covering the European Free Trade Association, the United Kingdom, and Oman — moved from negotiated text to active status across 2025 and 2026, extending a network of trade arrangements that had already begun operating with Australia and the United Arab Emirates four years earlier. A free-trade agreement with New Zealand was formalised by India, while separate negotiations with the European Union on a comparable trade deal were brought to a close.
Trade outreach from India spans multiple fronts, with ongoing efforts to formalise ties with the Eurasian Economic Union alongside a push for a separate arrangement with the Gulf Cooperation Council.
Across a range of large economies, a broadly comparable path has taken hold. Trade pacts with Mercosur and Mexico — one freshly minted, the other updated — now sit alongside completed negotiating rounds with Indonesia, India, and Australia on the European Union's diplomatic ledger. A revised trade pact between China and the Association of Southeast Asian Nations took effect in October 2025, with Canada having independently pursued its own set of bilateral and multilateral commerce arrangements over that period.
Broadening its trade partnerships across multiple regions has not pulled India away from pursuing closer economic integration with the United States. A bilateral trade agreement between Trump and Modi took shape as a formal joint commitment during their February 2025 meeting. Tariff-related friction formed the wider context in which those talks unfolded.
During the latter half of 2025, two separate layers of American trade penalties — a 26% reciprocal levy alongside an additional 26% duty tied to purchases of Russian oil — left India carrying one of the heavier tariff burdens among its principal trading partners.
Projections from Bloomberg Economics point to a broadening web of trade deals as a factor that could reinforce India's foothold in global supply networks while opening new market pathways over the longer term. How much those gains actually materialise will hinge on whether domestic policy reforms take hold, whether manufacturers can stay price-competitive, and whether workers find pathways into sectors where output per person runs higher.
