Historic Trade Pact Takes Effect
The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) officially entered into force on October 1, 2025. This comprehensive free trade agreement, signed on March 10, 2024, marks a significant milestone in economic relations, promising to enhance trade, investment, and job creation between India and the four EFTA member states: Iceland, Liechtenstein, Norway, and Switzerland.
The agreement is the culmination of 16 years of negotiations, which began in 2008 and spanned 21 rounds. It is designed to foster deeper economic integration and provide enhanced market access for businesses on both sides. A high-level event, the 'Prosperity Summit,' was held in New Delhi to commemorate the occasion, hosted by Shri Piyush Goyal, India's Minister of Commerce & Industry. Representatives from EFTA states, including Christine Lingg, Deputy Director of the Office for Foreign Affairs of Liechtenstein, attended the event, underscoring the collective commitment to the pact.
Investment and Job Creation Commitments
A cornerstone of the TEPA is an unprecedented investment pledge from the EFTA states. They have committed to investing USD 100 billion in India over the next 15 years. This substantial investment is projected to facilitate the creation of one million direct jobs in India, marking a first-of-its-kind provision in any free trade agreement signed by India. To ensure the smooth flow of these investments, a dedicated India-EFTA Desk has been operational since February 2025, serving as a single-window mechanism for investment facilitation.
Tariff Concessions and Market Access
The agreement outlines significant tariff concessions aimed at boosting bilateral trade:
- The EFTA bloc has offered concessions on 92.2% of its tariff lines, covering approximately 99.6% of India's exports, including 100% of non-agricultural products.
- India, in turn, has offered concessions on 82.7% of its tariff lines, encompassing 95.3% of EFTA exports.
While sensitive sectors such as dairy, soya, coal, and certain agricultural products have been excluded from full tariff liberalization by India, the pact will lead to lower prices for Indian consumers on high-quality Swiss products like watches, chocolates, and biscuits, as India phases out customs duties over 10 years. Indian exports such as pharmaceuticals, textiles, chemicals, machinery, tea, coffee, fruits, processed foods, marine products, leather, sports goods, toys, and gems and jewellery are expected to gain wider market access. Notably, basmati and non-basmati rice will receive duty-free access to EFTA markets.
Services Sector Liberalization
Beyond goods, the TEPA also includes extensive commitments in the services sector. India has offered market access in 105 sub-sectors to the EFTA states. In return, EFTA members have provided commitments across a broad range of sub-sectors: Switzerland in 128 sub-sectors, Norway in 114, Liechtenstein in 107, and Iceland in 110. These provisions aim to enhance opportunities in areas such as information technology, business services, and professional services, including nursing, chartered accountancy, and architecture.
5 Comments
Manolo Noriega
Finally, our pharmaceuticals and textiles get the global market access they deserve. Great for Indian businesses!
Fuerza
It's great that Indian exports like textiles and pharma will get wider access to EFTA markets. Yet, we must remain vigilant about the impact on our own domestic industries, especially those not fully protected.
Manolo Noriega
So, cheaper luxury goods for the rich, but what about the average Indian? This doesn't seem equitable.
Ongania
A new era of prosperity! This FTA will boost our exports and strengthen international ties.
Manolo Noriega
The 16 years of negotiations show a serious commitment from both sides, which is commendable. Still, the true measure of success will be in the actual implementation and how effectively both parties address any unforeseen challenges that arise.