Explained: How Are India’s Free Trade Agreements Driving PM Modi’s Dream Of Viksit Bharat By 2047?

India is rapidly advancing its global trade agenda with a series of strategic Free Trade Agreements (FTAs) aimed at transforming the nation’s economic trajectory.

From finalising a bilateral trade agreement with the United States to sealing FTAs with the United Kingdom and the EFTA countries, these deals are poised to significantly reshape India's trade dynamics, attract large-scale investments, and accelerate the country’s journey toward becoming a developed economy by 2047.

Speaking at the Confederation of Indian Industry (CII) Annual Business Summit, Union Minister of Commerce and Industry Piyush Goyal said, “We are well on track in our bilateral trade agreement with the United States of America, making fast progress with the European Union.”

He also confirmed that India has launched negotiations with New Zealand, while citing major progress in already finalised FTAs with the UAE, Australia, the UK, and the four EFTA countries—Iceland, Liechtenstein, Norway, and Switzerland.

Massive Investment Commitments

One of the most remarkable aspects of these new trade agreements is the scale of investment they are set to unlock. Referring to the EFTA agreement, Goyal stated, “EFTA countries have committed 100 billion dollar FDI to India in the next 15 years.”

This will be the first FTA globally to include such a forward-looking investment clause. According to the minister, this is likely to catalyse an even broader investment wave, possibly totalling $500 billion, excluding contributions from entities like the Norwegian Pension Fund.

Goyal emphasised the broader ambition behind these deals, saying, “We are not aiming small.”

Strategic Benefits of FTAs

The UK-India FTA, announced by Prime Ministers Narendra Modi and Keir Starmer, is one of the most comprehensive trade agreements India has ever signed. It will eliminate tariffs on nearly all goods traded between the two countries, boosting exports of Indian textiles, leather goods, engineering products, toys, marine items, and gems and jewellery.

Crucially, it opens the UK’s services sector to Indian professionals. “The FTA eases mobility for professionals including Contractual Service Suppliers; Business Visitors; Intra-Corporate Transferees... and Independent Professionals like yoga instructors, musicians and chefs,” the minister explained.

In the services sector, India will benefit from “one of the most ambitious FTA commitments from the UK”, particularly in areas such as IT, financial services, professional services, and education. These commitments are expected to create high-skilled jobs and open new business channels.

A Vision for Viksit Bharat by 2047

Goyal reaffirmed that these trade and investment efforts are directly aligned with India’s long-term development vision. “We are preparing India for Viksit Bharat by 2047—a developed, prosperous nation where speed, skill and scale will define our growth journey,” he said.

“Growth through trade, growth through resilient supply chains, growth through innovation—all of it will be incomplete until we promote inclusive growth that encompasses one and all,” he added, highlighting the government’s inclusive approach.

The International Monetary Fund (IMF) has projected India to become the world’s third-largest economy by 2027, and Goyal believes the momentum is strong.

“Despite all the turbulence, all the volatility, uncertainty and complexities that the world is going through, we continue to be the fastest-growing economy in the world. We continue to power global growth,” he said.

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Reforms and Resilience

Backing these trade ambitions is a series of reforms aimed at improving the ease of doing business. Over 40,000 compliance burdens have been removed, nearly 2,000 obsolete laws repealed, and multiple laws decriminalised.

Goyal praised the Jan Vishwas Bill, calling it a symbol of trust between the government and citizens: “The Act promotes self-certification, encourages businesses to offer suggestions, and simplifies people’s lives. It reflects a government that trusts its stakeholders.”

India’s FDI policies have also been liberalised significantly. Most sectors are now open to 100% FDI through the automatic route.

As a result, FDI inflows rose to a provisional $81.04 billion in FY 2024–25—up 14% from the previous year. The services sector attracted the highest share, followed by computer software and hardware, and trading.

A Rising Global Investment Hub

India has received $748.78 billion in FDI over the past eleven years—nearly 70% of the total inflows since liberalisation. The number of source countries has expanded from 89 in FY 2013–14 to 112 in FY 2024–25. This points to India’s rising global profile as a stable and attractive investment destination.

The manufacturing sector, in particular, is becoming a magnet for foreign capital, with FDI into manufacturing rising by 18% year-on-year.

These investments are helping India emerge as a key player in global supply chains—further supported by the trade access provided by the new FTAs.