India's Chief Economic Advisor (CEA), V. Anantha Nageswaran, anticipates that the country's recent Free Trade Agreements (FTAs) will significantly boost exports, providing a cushion against global economic shocks. Nageswaran's optimistic outlook is supported by the Economic Survey 2025-26, which highlights the potential of these agreements to enhance India's manufacturing and export competitiveness.
The CEA suggests India's potential GDP growth could reach 7.5% to 8% in the coming years, an increase from the current 7% potential. This upward revision hinges on enhancing manufacturing and export competitiveness, alongside addressing structural issues like land acquisition and reducing production costs. The Economic Survey 2025-26, presented on January 29, 2026, projects a solid 6.8-7.2% GDP growth for Fiscal Year 2027, acknowledging the economy's resilience amidst global volatility. For the current fiscal year, growth is estimated to have reached 7.4%.
India has been actively pursuing a diversified trade strategy, including the recently concluded India-UK Comprehensive Economic and Trade Agreement (CETA) and the India-Oman Comprehensive Economic Partnership Agreement (CEPA). Negotiations for an FTA with New Zealand were concluded in December 2025. Additionally, India is engaged in discussions with the US, Chile, and Peru for potential free trade agreements. The India-Oman CEPA, signed on December 18, 2025, grants India market access for goods and services in the Middle East and Africa.
The Economic Survey emphasizes that an expanding network of FTAs bolsters India's trade strategy by providing reliable market access amidst global uncertainty. These agreements enable export-focused firms to increase production and become more integrated into global value chains. FTAs also improve export competitiveness by exposing local firms to international competition, encouraging them to prioritize productivity and reliability.
The free trade agreement (FTA) with the 27-member European Union (EU) would expand market access for India's labor-intensive sectors and deepen integration with Europe's technological and manufacturing capabilities. The FTA with Europe can support the continent's efforts to revitalize parts of its manufacturing base and, at the same time, strengthen India's manufacturing competitiveness, export resilience and strategic capacity. A new analysis by the Kiel Institute for World Economy shows that deeper EU-India integration could boost bilateral trade by 41 to 65 per cent. The analysis also projects real income gains of 0.12 to 0.13 per cent of GDP on both sides. Model simulations suggest the deal could increase Indian exports to the EU by 41 per cent and EU exports to India by 65 per cent.
To help exporters leverage the benefits of FTAs and preferential trade agreements, the tariff explorer service on the Trade Connect ePlatform provides information on tariff concessions available to eligible exports from the country. Realizing the potential of trade agreements requires that we can produce competitively.
Nageswaran cautioned that rising crude oil prices and geopolitical developments could pose external risks. However, he believes that India's FTAs would help cushion some external shocks by opening market access, particularly for labor-intensive sectors benefiting from lower or zero duties. He stated that Indian businesses have a good shot at supplying these markets as and when the FTAs become operational.
