India's Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) is set to take effect on October 1, 2025. This marks India's first trade agreement with a European bloc, a significant milestone in its global trade engagements. The EFTA bloc comprises four nations: Iceland, Liechtenstein, Norway, and Switzerland.
The agreement, finalized in March 2024, aims to bolster trade and economic ties between India and the EFTA countries. Union Minister of Commerce and Industry, Piyush Goyal, announced the operationalization of the FTA, highlighting the eagerness of developed nations to sign trade agreements with India. He noted that India has already signed agreements with the UAE, Australia, and the United Kingdom.
A high-profile launch event is scheduled to be held at Bharat Mandapam in New Delhi. The event will be attended by Minister Piyush Goyal, senior ministers from the EFTA nations, government officials, and industry representatives. The purpose of the launch event is not merely ceremonial but also to ensure that industry stakeholders are well-positioned to take full advantage of the agreement.
Under the TEPA, India will eliminate tariffs on 80-85% of goods imported from EFTA countries. In return, Indian exporters will enjoy duty-free access to 99% of goods in EFTA markets. Sensitive sectors, particularly agriculture and dairy, have been excluded from tariff concessions to protect domestic farmers.
A key highlight of the TEPA is the investment commitment from the EFTA bloc. The four nations have pledged to invest $100 billion in India over 15 years, with $50 billion expected in the first 10 years and another $50 billion in the subsequent five years. The Indian government estimates that this investment could generate one million direct jobs in India during that period.
While EFTA countries already have relatively low import tariffs, potentially limiting immediate market access gains for India, the investment-linked framework is viewed as a strategic model that ensures long-term benefits. Switzerland is India's largest trading partner within the EFTA bloc, accounting for nearly three-fourths of India's exports of $1.97 billion and 97% of its imports of $22.44 billion from EFTA in FY25.
In addition to the EFTA agreement, India is also negotiating trade agreements with 27 other countries, including the United States, the European Union, and Peru. Terms of reference for a pact with the Eurasian bloc have also been finalized.
Minister Goyal highlighted India's economic transformation since 2014, with foreign exchange reserves now standing at $700 billion, nearly three times higher than in 2014. He also stated that India is expected to become the world's third-largest economy within the next two years, with a GDP of $5 trillion. India's GDP grew 7.8% in the last quarter, and inflation has fallen to 2%, the lowest since independence.
