The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) is set to take effect on Wednesday, October 1, 2025. Signed on March 10, 2024, this landmark agreement marks India's first Free Trade Agreement (FTA) that links market access to long-term investment and job creation commitments.
The EFTA bloc comprises four European nations: Switzerland, Norway, Iceland, and Liechtenstein. With a combined GDP exceeding $1 trillion and a population of approximately 13 million, these nations collectively represent the world's ninth-largest merchandise trader and fifth-largest commercial services trader.
Under the TEPA, the EFTA nations have pledged to channel $100 billion (Rs 8.88 lakh crore) in foreign direct investment (FDI) into India over the next 15 years, with $50 billion expected within the first 10 years. This investment is projected to generate one million direct jobs in India. The agreement includes a provision that allows India to re-balance or suspend duty concessions if the proposed investments do not materialize. Portfolio investments do not fall under this commitment.
In terms of tariff concessions, the EFTA will eliminate tariffs on 92.2% of tariff lines for Indian goods. This translates to unprecedented 100% tariff elimination on non-agricultural goods, along with concessions on processed agricultural products. Indian exporters in sectors such as machinery, organic chemicals, textiles, and processed foods will gain significantly improved access to EFTA markets. Key exports that are expected to benefit include textiles, leather, marine products, rice, grapes, biscuits, coffee, chemicals, and engineering goods. Gems and jewellery, electronics, and sports goods are also anticipated to experience growth due to reduced tariffs and simplified compliance procedures.
India, in turn, will offer concessions on 82.7% of its tariff lines, covering 95% of EFTA exports. While providing access to its markets, India has taken steps to protect sensitive sectors, including dairy, coal, pharmaceuticals, and processed foods. Gold, which constitutes a significant portion (over 80%) of India's imports from EFTA, will remain unaffected by the new concessions.
The agreement comprises 14 chapters with a primary focus on market access related to goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access on services, intellectual property rights, trade and sustainable development, and other legal and horizontal provisions.
Beyond goods and services, the TEPA aims to stimulate services exports in sectors such as IT, business services, education, and audio-visual services. It also includes provisions for Mutual Recognition Agreements in professional services like nursing, chartered accountancy, and architecture.
The India-EFTA TEPA is viewed as a significant opportunity to boost India's exports and attract investments. The agreement is expected to enhance competitiveness, reduce compliance costs, and accelerate access to EFTA markets for Indian businesses. It is also aligned with the Indian government's "Make in India" and "Atmanirbhar Bharat" initiatives.
Commerce and Industry Minister Piyush Goyal has stated that India is actively pursuing free trade agreements with other nations, including the United States, the European Union, New Zealand, Oman, Peru, and Chile.
