Prime Minister Mr. Narendra Modi’s Free Trade Push Could Lead to US$ 140 Billion GDP Gain for India
- IBEF
- October 14, 2026
A more protectionist US could create opportunities for India as countries diversify supply chains and seek preferential market access. According to an analysis based on a World Trade Organization (WTO) global economic model, India’s free trade agreements (FTAs) could raise the country’s GDP by 1.7% by 2035 if agreements already in force, along with those concluded or under negotiation with the European Union and New Zealand, are implemented from 2027. This would translate into a gain of about Rs. 13.30 lakh crore (US$ 140 billion) at constant 2025 prices. The analysis noted that FTAs could support India through wider market access, lower import costs, higher foreign direct investment (FDI) and productivity gains. India’s agreements with the European Free Trade Association (EFTA), the UK and Oman entered into force during 2025-26, adding to existing agreements with Australia and the UAE.
The analysis also estimated that a potential US-India trade agreement could add another 0.2 percentage point to India’s GDP growth by 2035. If ongoing negotiations with the Eurasian Economic Union (EAEU), Gulf Cooperation Council (GCC) and Israel are concluded, the overall GDP gain could reach 2.1%, equivalent to about Rs. 16.15 lakh crore (US$ 170 billion). Indian exports could be almost 10% above the baseline by 2035 if all the agreements are implemented. Further domestic reforms could amplify these gains. A 2% reduction in manufacturing production costs could add about 0.5 percentage points to GDP gains, while shifting underemployed agricultural workers towards manufacturing and services could add about two percentage points. The analysis highlighted effective implementation of trade agreements, access to energy and critical minerals, advanced technologies and greater utilization of India’s workforce as key factors for maximizing the economic benefits.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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