In a landmark development for India’s global trade landscape, the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) has officially taken effect as of October 1, 2025, ushering in a new era of economic collaboration with Iceland, Liechtenstein, Norway, and Switzerland. This agreement, signed on March 10, 2024, in New Delhi, promises to channel $100 billion in investments into India over the next 15 years while creating one million direct jobs. This is India’s first free trade pact with these four developed European nations and highlights a strategic push toward resilient partnerships amid global uncertainties.
EFTA, an intergovernmental organization established in 1960 to promote free trade and economic integration among its members, now consists of Iceland, Liechtenstein, Norway, and Switzerland, four nations not part of the European Union. These countries are renowned for their robust economies, high standards of living, and emphasis on innovation, with Switzerland serving as India’s primary trading partner in the group, followed by Norway. Together, they provide a gateway for Indian goods and services while offering access to cutting-edge technology and capital inflows. EFTA is one of the three important economic blocs of Europe, the other two are the UK and the EU.
TEPA is a comprehensive and forward-thinking accord comprising 14 chapters that address critical aspects of trade, including market access for goods, rules of origin, trade facilitation, remedies against unfair practices, sanitary and phytosanitary standards, technical barriers to trade, investment promotion, services, intellectual property rights, sustainable development, and mechanisms for dispute resolution. It is one of the most ambitious trade agreement in scale and intent.
For the first time in any Indian free trade agreement, it incorporates binding commitments on investment and employment generation, aligning seamlessly with India’s “Atmanirbhar Bharat” initiative for self-reliance and EFTA’s pursuit of diversified, dependable economic alliances. At its core, the agreement envisions unlocking $100 billion in investments and creating one million direct jobs in India over the next fifteen years, marking it as one of the most forward-looking trade partnerships in the country’s economic history.
At the heart of TEPA lies a robust investment framework, where EFTA nations have committed to injecting $50 billion in foreign direct investment into India during the initial 10 years, followed by an additional $50 billion over the subsequent five years. These funds are earmarked for long-term, capacity-enhancing projects in manufacturing, innovation, and research, rather than fleeting portfolio investments, and are projected to generate one million direct jobs by linking India’s talented workforce with Europe’s advanced technological networks. To facilitate this, an India-EFTA Desk was established in February 2025 as a centralized hub for investors, prioritizing sectors such as renewable energy, life sciences, engineering, and digital transformation, while fostering joint ventures and collaborations among small and medium-sized enterprises.
The agreement ensures balanced market access by reducing or eliminating tariffs strategically. EFTA has conceded tariffs on 92.2 percent of its product lines, encompassing 99.6 percent of India’s exports, which include all non-agricultural items and processed agricultural goods. In reciprocity, India has provided concessions on 82.7 percent of its tariff lines, covering 95.3 percent of EFTA’s exports, but with protective measures in place. Notably, over 80 percent of EFTA imports to India involve gold, where effective duties remain unchanged. Sensitive domestic sectors like dairy, soya, coal, pharmaceuticals, medical devices, and certain food products are either excluded or subject to gradual tariff reductions over five to ten years, allowing Indian industries under programs like Make in India and the Production Linked Incentive Scheme ample time to adapt and compete.
In the realm of services, which account for more than 55 percent of India’s gross value added, the TEPA paves the way for expanded opportunities in knowledge-driven and digital domains. India has committed to opening 105 sub-sectors, while EFTA members offer access ranging from 107 in Liechtenstein to 128 in Switzerland, emphasizing Indian strengths in information technology, business services, education, media, cultural activities, and professional fields.
A standout feature is the provision for mutual recognition agreements in professions such as nursing, chartered accountancy, and architecture, facilitating easier mobility for skilled professionals. Furthermore, the pact enhances market entry through digital service delivery, establishment of commercial presences, and assured temporary stays for key personnel, poised to elevate India’s exports in areas like information technology, business consulting, cultural and recreational services, education, and audiovisual content.
On intellectual property rights, the TEPA upholds standards consistent with the global Trade-Related Aspects of Intellectual Property Rights agreement, delivering strong protections while safeguarding India’s flexibility in public health and generic medicine production. This includes measures against patent evergreening to maintain affordable access to pharmaceuticals, fostering mutual trust—particularly with innovation powerhouse Switzerland—and positioning the pact as a bridge between creative advancement and equitable inclusion.
Sustainability forms a cornerstone of the Trade and Economic Partnership Agreement, with commitments to environmental protection, inclusive growth, social advancement, and transparent trade practices that promote efficiency, simplification, harmonization, and procedural consistency.
Sector-specific gains under TEPA span a broad spectrum. In agriculture and allied products, India’s exports to EFTA reached $72.37 million in fiscal year 2024-25, featuring items like guar gum, processed vegetables, basmati rice, pulses, fruits, and grapes, with Switzerland and Norway handling over 99 percent of this trade. The agreement eliminates or reduces tariffs, such as in Switzerland where duties up to 272 Swiss francs per 100 kilograms on fresh grapes, nuts, seeds, and vegetables are removed, alongside eliminations on food preparations, confectionery, and biscuits. In Norway, duty-free access extends to select food preparations, condiments, non-feed rice, processed vegetables and fruits, biscuits, malt extracts, and beverages, while Iceland sees high tariffs up to 97 Icelandic krona per kilogram on processed foods, chocolate, confectionery, and fresh or chilled vegetables slashed to zero. Coffee benefits from zero duties across EFTA, tapping into a $175 million import market, and tea exports have already shown improved realizations, rising to $6.77 per kilogram in 2024-25 from $5.93 the prior year.
Marine products also stand to gain, with Norway exempting duties up to 13.16 percent on fish and shrimp feed, Iceland eliminating tariffs up to 10 percent on frozen, prepared, and preserved shrimps, prawns, squid, and cuttlefish alongside reductions up to 55 percent on fish feed, and Switzerland imposing zero duty on fish fats and oils excluding liver oil, enhancing the competitiveness of Indian exports.
In industrial and manufacturing realms, engineering goods exports climbed 18 percent to $315 million in 2024-25, with expanded access for electric machinery, copper products, energy-efficient systems, and precision engineering. Textiles and apparel, valued at $0.13 billion, along with leather, footwear, sports goods, and toys, benefit from stable duties and streamlined standards, while gems and jewellery secure predictable duty-free entry for diamonds, gold, and colored gemstones.
The electronics and software sector receives a strategic impetus from the $100 billion investment pledge, particularly aiding micro, small, and medium enterprises and original equipment manufacturers in scaling globally. Opportunities include medical electronics, diagnostic devices, wearables, smart sensors, and secure communication modules in Switzerland, leveraging the intellectual property chapter for technology protection; electric vehicle components, battery management systems, marine electronics, navigation tools, sonar, Internet of Things buoys, smart grids, and energy monitoring devices in Norway, aligning with its climate technology objectives and public procurement; compact medical devices, diagnostics, smart home and energy-efficient electronics, and educational technology hardware like tablets and sensors in Iceland, targeting niche distributors and health initiatives; and industrial control systems, secure embedded electronics for banking, and high-precision components for original equipment manufacturers in Liechtenstein, positioning India as a trusted electronics manufacturing services partner.
Chemicals, plastics, and allied products see zero or reduced tariffs on 95 percent of India’s exports, lowering pre-agreement duties up to 54 percent and projecting growth from $49 million to $65-70 million, encompassing pet food, rubber, ceramics, glassware, plastics, and shellac-based items, thereby diversifying into premium European markets and reducing dependence on high-tariff regions like the United States.
TEPA embodies a foundation of mutual confidence, serving as more than a mere trade deal for India by acting as a tool for strategic alignment with transparent, rules-based economies that prioritize innovation. It exemplifies prudent liberalization, shielding domestic priorities while elevating India’s stature in international supply chains through inflows of capital, jobs, technology, and sustainable practices.
In implementation terms, the pact’s activation on October 1, 2025, initiates immediate tariff reductions, investment facilitation, and benefits, supported by the India-EFTA Desk operational since February.
For India, TEPA is more than a trade pact, it is an instrument of strategic trust with like-minded economies that value transparency, rule-based trade, and innovation. It also demonstrates a mature approach to trade liberalisation, one that protects domestic interests while projecting India as a reliable partner in global supply chains. By opening doors to investment, employment, technology and sustainability, TEPA captures the essence of a modern economic partnership, ambitious, balanced, and forward-looking.
In conclusion, the India–EFTA Trade and Economic Partnership Agreement (TEPA) represents a historic milestone, establishing India’s first FTA with four developed European nations. It brings with it commitments of USD 100 billion in investments and the creation of 1 million direct jobs over the next 15 years. The agreement enhances market access for goods and services, strengthens intellectual property rights, and promotes sustainable and inclusive development, while advancing the objectives of Make in India and Atmanirbhar Bharat.
