The World Trade Organization has warned that high trade costs and complex regulations could slow India's path to becoming a developed nation by 2047. While acknowledging strong GDP growth and record exports, the report highlights the need for deeper structural reforms. Investors should track how future policy changes impact manufacturing competitiveness and foreign investment inflows.
Detailed Coverage
The World Trade Organization has released its latest Trade Policy Review for India, presenting a balanced view of the country’s economic trajectory. While the report recognizes India’s status as the fastest-growing economy within the G20, it identifies specific structural challenges that could hinder the long-term objective of achieving developed nation status by 2047. The WTO Secretariat expects India's real GDP to maintain a steady expansion between 6.8% and 7.2% through the fiscal year 2027-28.
Trade Policy and Export Performance
India’s commitment to global integration is reflected in its aggressive pursuit of trade agreements. Since 2021, the nation has signed or concluded eight major pacts, bringing the total number of active free trade agreements to 19. This strategic shift has contributed to a significant rise in external trade. Combined merchandise and services exports reached $863.1 billion in the 2025-26 fiscal year, a sharp increase from the $676.5 billion recorded in 2021-22. These agreements are designed to help Indian industries access foreign markets and become more integrated into international value chains.
Structural Challenges and Regulatory Barriers
Despite this export success, the WTO report points to persistent hurdles. A major area of concern is the prevalence of relatively high tariffs and complex import and export controls. These barriers are particularly notable in essential sectors such as food grains and fertilizers, where state trading measures remain extensive. The WTO suggests that reducing these restrictions and simplifying regulatory frameworks could improve resource allocation and make the domestic market more attractive to international investors.
External Pressures and Future Outlook
The broader global environment remains complex. Beyond internal policy, Indian exporters are increasingly facing non-tariff measures from trading partners, including stringent quality standards and regulatory compliance requirements. These external factors, coupled with ongoing geopolitical tensions and climate-related disruptions, require a focus on productivity improvements and infrastructure development.
Commerce Secretary Rajesh Agrawal emphasized India's continued dedication to a rules-based multilateral trading system. Looking ahead, the primary monitorables for the Indian economy include the pace of domestic reform, the ability to navigate global non-tariff barriers, and the success of ongoing initiatives to improve the ease of doing business. Investors and policymakers alike will track whether future policy adjustments can effectively balance the protection of essential domestic sectors with the need for greater global competitiveness.