The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) came into effect on October 1, 2025. Union Minister for Commerce and Industry Piyush Goyal announced the implementation of the FTA with the EFTA countries, which include Iceland, Liechtenstein, Norway, and Switzerland. The agreement, signed on March 10, 2024, after 16 years of negotiations, aims to boost trade, investment, and job creation between India and the EFTA bloc.
Key Aspects of the TEPA
The TEPA is a comprehensive trade pact encompassing 14 chapters that cover various areas, including trade in goods, services, investment, intellectual property rights, and sustainable development. It is designed to eliminate or reduce tariffs on most goods traded between India and the EFTA countries and to liberalize trade in services and investment.
Tariff Liberalization
Under the agreement, EFTA has granted concessions on 92.2% of its tariff lines, covering approximately 99.6% of India's exports. This includes non-agricultural goods and processed agricultural products. India, in turn, has offered concessions on 82.7% of its tariff lines, covering 95.3% of EFTA exports. However, certain sensitive sectors, such as dairy products and specific agricultural goods, have been excluded from full tariff liberalization to protect domestic interests. Gold, EFTA's largest export to India, also remains outside the scope of effective duty changes. A significant gain for India is that basmati and non-basmati rice will receive duty-free access to EFTA markets without reciprocity.
Investment and Job Creation
A key feature of the TEPA is the long-term investment commitment from the EFTA nations, which have pledged to invest $100 billion in India over the next 15 years. This investment is expected to generate one million direct jobs in India. The investment will be implemented in two phases: $50 billion during the first decade and another $50 billion in the following five years. This commitment excludes foreign portfolio investment (FPI) and focuses on long-term capital for productive capacity building.
Benefits for the Services Sector
The agreement also aims to enhance opportunities in the services sector. India has offered commitments in 105 sub-sectors to the EFTA, while securing enhanced access in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland. The pact facilitates Mutual Recognition Arrangements in professional services, including nursing, chartered accountancy, and architecture, and strengthens opportunities in information technology and business services.
Facilitating Investments
To ensure the smooth flow of investments, a dedicated India-EFTA Desk has been operational since February 2025. This desk serves as a single-window mechanism for investment facilitation, supporting EFTA businesses in investing, expanding, and establishing operations in India.
Rules of Origin
The Ministry of Finance has notified the Customs Tariff (Determination of Origin of Goods under the Trade and Economic Partnership Agreement between India and the EFTA States) Rules, 2025, which came into force on October 1, 2025. These rules lay down detailed guidelines for determining the origin of goods traded under the TEPA, which is essential for granting preferential tariff benefits. The rules include criteria for wholly obtained goods, sufficient processing, and exclusions for simple operations.
India's Trade Landscape
Despite its strategic importance, EFTA is currently a modest trading partner for India, ranking fifth after the EU, US, UK, and China. In FY 2024–25, bilateral trade stood at $24.4 billion, with India exporting $1.96 billion to the EFTA members and importing $22.45 billion. Switzerland is India's largest trading partner within the EFTA bloc, followed by Norway. India's primary exports to EFTA include pharmaceuticals, textiles, chemicals, and machinery, while its imports mainly consist of gold, silver, coal, pharmaceuticals, medical equipment, and dairy machinery.
Government Perspective
Piyush Goyal has emphasized that developed nations are keen to sign FTAs with India, which has already concluded agreements with the UAE, Australia, and the UK. He also highlighted India's ongoing discussions with the US, EU, New Zealand, Oman, Peru, and Chile, with Qatar and Bahrain expressing interest. Goyal noted that India's foreign exchange reserves have reached $700 billion, reflecting the country's strong global standing.
