India’s trade diplomacy witnessed a historic breakthrough with the India–EFTA Trade and Economic Partnership Agreement (TEPA) coming into force on October 1, 2025. Signed between India and the European Free Trade Association (EFTA) nations—Switzerland, Norway, Iceland, and Liechtenstein—this is India’s first trade pact with a firm investment commitment of USD 100 billion over the next 15 years, aimed at generating one million direct jobs in India.
Key Provisions of TEPA
Investment and Job Commitments
- The agreement includes a binding commitment from EFTA to invest USD 100 billion in India over 15 years.
- This investment is expected to create one million direct jobs, with mechanisms in place to track progress.
- India retains the right to suspend tariff concessions if these commitments are not met.
Asymmetric Tariff Reductions
- EFTA nations will eliminate duties on 99.6% of Indian exports, while India will phase out or reduce tariffs on 95.3% of EFTA’s exports.
- Sensitive sectors such as gold, dairy, and coal are excluded to protect domestic interests.
Market Access in Services
- The agreement enhances access for Indian service providers in areas like IT, accountancy, nursing, education, audio-visual services, and Mode 4 mobility (temporary movement of professionals).
- It also encourages Mutual Recognition Agreements (MRAs) for qualifications, easing entry for Indian professionals.
Rules of Origin and Trade Facilitation
- TEPA includes detailed provisions on rules of origin, customs cooperation, digital documentation, and fast-track dispute resolution.
- This will make trade more predictable and reduce delays and compliance burdens for exporters and importers.
Strategic and Sectoral Opportunities
The agreement opens new avenues for collaboration in,
- Life sciences and pharmaceuticals
- Clean energy and geothermal technology
- Precision engineering and high-end manufacturing
- Shipbuilding, maritime logistics and container manufacturing
- AI, digital services and R&D
- Education, tourism, and creative industries
India brings scale, demand, and talent, while EFTA contributes capital, innovation, and technical expertise. TEPA thus embodies economic complementarity between both regions.
Implementation Strategy
India and EFTA will operationalise TEPA through,
- Sector-specific roadmaps in pharma, textiles, food processing, engineering, and marine exports
- Outreach programs for MSMEs, including buyer-supplier matchmaking
- Capacity building in quality standards, packaging, and sustainability
- Focused efforts on logistics reforms to reduce transit and port dwell times
- Joint monitoring of FTA utilisation, investment inflow, and services trade
Benefits and Significance
- Boosts FDI inflow from highly capitalised economies
- Creates high-quality jobs in manufacturing and services
- Diversifies export destinations and reduces dependency on a few key markets
- Enhances India’s geo-economic footprint in Europe
- Demonstrates India’s ability to negotiate balanced, development-oriented trade deals
- Improves access to affordable high-end goods like Swiss watches, machinery, and medical devices
Static Facts
- EFTA Countries: Switzerland, Norway, Iceland, Liechtenstein
- TEPA Signed On: 10 March 2024
- Came Into Force: 1 October 2025
- Negotiation Timeline: Started in 2008, concluded after 21 rounds
- Investment Commitment: USD 100 billion over 15 years
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