The India–European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA), effective from October 1, 2025, represents India’s first Free Trade Agreement with four developed European economies — Switzerland, Norway, Iceland, and Liechtenstein. The pact commits EFTA to $100 billion in investments and the creation of 1 million direct jobs in India over 15 years, marking the first binding pledge of its kind in any Indian trade deal.
The agreement balances India’s ambition for export-led growth with its need to protect sensitive sectors such as dairy, coal, and pharmaceuticals. It covers 14 chapters ranging from trade in goods and services to investment, intellectual property rights, sustainable development, and digital cooperation. The structure positions TEPA as one of India’s most comprehensive and forward-looking trade frameworks to date.
Investment and employment commitments
EFTA’s investment commitment includes $50 billion within the first decade, followed by an additional $50 billion in the subsequent five years. Unlike short-term portfolio flows, these are long-horizon, capacity-building investments in manufacturing, research, and innovation. The inflow is expected to create one million jobs and accelerate technology transfers in sectors such as life sciences, renewable energy, and engineering.
To facilitate these inflows, an India–EFTA Investment Facilitation Desk has been operational since early 2025, acting as a single-window platform for project clearance and SME collaborations. The agreement ensures that India’s domestic industries have a gradual adjustment window, with phased tariff reductions of 5–10 years on key products under the Make in India and PLI programmes.
Expanding trade and services access
TEPA eliminates or reduces tariffs on 92.2% of EFTA’s tariff lines, covering nearly 99.6% of India’s exports to these markets. In return, India offers access on 82.7% of tariff lines, protecting over 80% of gold imports and key agricultural goods. This balanced reciprocity strengthens India’s competitive positioning in high-value sectors such as machinery, processed food, apparel, electronics, and engineering.
In services, TEPA provides wider market access through digital delivery, commercial presence, and skilled professional mobility. India gains recognition for professional qualifications in nursing, accounting, and architecture through Mutual Recognition Agreements (MRAs), enhancing opportunities for its service workforce in high-income markets.
Boosting exports and innovation
Indian exporters in engineering goods, textiles, marine products, and processed foods stand to gain immediate access advantages. The removal of tariffs on fish, prawns, coffee, and confectionery enhances export competitiveness, while simplified standards improve ease of trade for MSMEs. Switzerland’s strong innovation ecosystem and India’s manufacturing scale are expected to converge in joint ventures and technology collaborations.
Intellectual property provisions reaffirm TRIPS commitments while preserving India’s flexibility to ensure access to affordable medicines. This balance strengthens investor confidence without undermining domestic policy space. The agreement also integrates sustainability goals, promoting energy-efficient manufacturing and low-carbon trade processes.
Strategic and economic implications
For India, TEPA represents more than a trade pact — it’s a statement of trust and strategic alignment with economies that value transparency, sustainability, and rule-based commerce. The deal enhances India’s access to advanced European markets while projecting it as a reliable partner in global supply chains. For EFTA, it diversifies risk and strengthens economic ties with one of the fastest-growing major economies.
If executed effectively, TEPA can reshape India’s trade map by boosting high-quality investments, accelerating export diversification, and generating formal employment. It sets a template for future FTAs that balance ambition with inclusion and resilience.