The Trade and Economic Partnership Agreement (TEPA) between India and the four-nation European bloc, the European Free Trade Association (EFTA), is expected to come into force by September 2025, according to Commerce and Industry Minister Piyush Goyal. The agreement, signed on March 10, 2024, has already secured approvals from the Parliaments of all four EFTA member countries: Iceland, Liechtenstein, Norway, and Switzerland.
Goyal, currently on an official visit to Switzerland to promote trade and investments, stated that the agreement is in its final stages of approval, with Switzerland undergoing an objection period until July 10. He noted that July and August are typically holiday months in Switzerland, suggesting that the implementation would proceed swiftly after this period. "By September, TEPA will be operationalised. It will enter into force by September," Goyal told reporters.
Under the TEPA, India is set to receive an investment commitment of USD 100 billion from the EFTA nations over the next 15 years. In return, India will reduce or eliminate tariffs on specific products, including Swiss watches, chocolates, and cut and polished diamonds. This landmark commitment is the first of its kind in any trade deal India has signed, with the EFTA nations pledging USD 50 billion in investments within the first 10 years of the agreement and an additional USD 50 billion over the subsequent five years. This investment is projected to create one million direct jobs in India.
During his visit, Goyal held bilateral meetings with over a dozen companies, many of whom expressed keen interest in investing in India. Swiss firms have shown particular interest in sectors like pharmaceuticals, cybersecurity, and machinery manufacturing. Goyal emphasized that India offers 100% foreign direct investment (FDI) in machine manufacturing, which will help reduce India's dependence on machine imports from China. He also suggested that Swiss firms hold board meetings in India to experience the country's investment potential firsthand.
The Minister highlighted India's growing attractiveness as an investment destination, noting the establishment of nearly 2,000 Global Capability Centers (GCCs) in the country. He stated, "The world today recognizes that the best place to do business is India... India is also a preferred destination for services."
Besides the EFTA agreement, India is actively engaged in negotiating trade pacts with other countries, including New Zealand, Chile, Peru, and Oman. Goyal also indicated that a trade pact with the European Union (EU) could be concluded "faster than expected" and that discussions are ongoing to finalize a bilateral investment treaty (BIT) with the EU.
The India-EFTA TEPA is expected to significantly boost trade and investment between the two regions. By reducing tariffs and facilitating investment flows, the agreement aims to create new opportunities for businesses and promote economic growth in both India and the EFTA countries. The agreement reflects the strengthening economic ties between India and the EFTA bloc and underscores India's growing importance as a global economic player.
