By Harsha Bothra
Philippines President Ferdinand Marcos Jr., during his official state visit to India, remarked that the term “Indo-Pacific” is a more accurate evolution of “Asia-Pacific”. He said it better reflects the global nature of politics, trade, and the economy today.
In contrast, former U.S. President Donald Trump imposed a 25% tax on Indian goods, along with an additional 25% penalty on the purchase of Russian oil, and controversially described India’s economy as “dead.”
Yet, global data tells a very different story. According to the IMF, by the end of 2027, India is projected to surpass Germany and become the third-largest economy in the world—a position it could achieve as early as the end of 2025 if the current growth rate continues. India has already emerged as the third most powerful nation in Asia, overtaking Japan. The domestic market is expected to see a strong focus on the theme “Make in India, Sell in India”, as companies increasingly target the vast Indian consumer base.
India’s Economic Momentum
Despite the COVID-19 pandemic and global tariff challenges, India has risen as a major global economic force over the past decade. A young population, competitive labor costs, and a large consumer market have made India an attractive trading partner worldwide.
Recent trade milestones include the signing of a Free Trade Agreement (FTA) with the United Kingdom, concluded after negotiations since 2022, and a Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) covering Iceland, Liechtenstein, Norway, and Switzerland.
The TEPA marks a historic first in FTAs—introducing a legal commitment to promote targeted investments and job creation in India. Key focus sectors include pharmaceuticals, medical devices, and processed foods, while sensitive sectors such as dairy, soy, coal, and certain agricultural products are excluded. TEPA also includes provisions for Mutual Recognition Agreements (MRAs) in professional services such as nursing, chartered accountancy, and architecture.
This agreement strengthens India’s integration into EU markets, with Switzerland serving as a potential hub—especially as over 40% of Switzerland’s global services exports go to the EU.
Expanding Global Trade Network
India has signed multiple FTAs and trade pacts with Sri Lanka, Bhutan, Thailand, Singapore, Malaysia, South Korea, Japan, Australia, the UAE, Mauritius, ASEAN, and the EFTA bloc.
The India-Pacific Trade Agreement (formerly the Bangkok Agreement), signed in 1975, remains active among Bangladesh, China, India, Laos, South Korea, and Sri Lanka. Additional major agreements include:
- India–ASEAN FTA
- India–Singapore Comprehensive Economic Cooperation Agreement (CECA)
- India–Thailand FTA
- India–Malaysia CECA
- India–Japan Comprehensive Economic Partnership Agreement (CEPA)
- India–South Korea CEPA
- SAFTA Agreement
- India–Sri Lanka FTA
- India–Mauritius CECPA
- India–UAE CEPA
- India–Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA)
Strategic Partnerships and Global Influence
Beyond trade, India plays an active role in regional and global forums such as the East Asia Summit, G20, and ASEAN. Strategic alliances include the Indo-Pacific Economic Framework for Prosperity, the Quadrilateral Security Dialogue (QUAD), and BRICS.
Currently, India stands out as the fastest-growing major economy with an estimated annual growth rate of 6.5%, supported by strong domestic demand, easing inflation, robust capital markets, and growing exports. Rising foreign exchange reserves and increasing foreign investments signal global confidence in India’s long-term economic prospects.
Looking Ahead
As India navigates the complexities of the 21st century, it is not only participating in the global economy but actively shaping it—offering new models for development and becoming a key pillar in a multipolar world order. To fully realize its potential, India will need to prioritize inclusive growth, technological advancement, and strategic international partnerships.