The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) marks a major milestone in India’s global trade strategy. Set to come into effect from October 1, 2025, this agreement aims to enhance trade, investment, and employment while maintaining safeguards for sensitive domestic sectors.
Who Are the EFTA Members?
The European Free Trade Association (EFTA) includes four non-EU European countries:
- Iceland
- Liechtenstein
- Norway
- Switzerland
These economies are known for their high purchasing power, robust infrastructure, and advanced manufacturing and service sectors—making them strategic partners for India.
Key Highlights of the India-EFTA TEPA
| Parameter | Details |
|---|---|
| Effective Date | October 1, 2025 |
| Participating Countries | India, Iceland, Liechtenstein, Norway, Switzerland |
| Investment Commitment | $100 billion FDI over 15 years by EFTA, with 1 million job creation target |
| Tariff Concessions by EFTA | 92.2% of tariff lines; covering 99.6% of Indian exports |
| Tariff Concessions by India | 82.7% of tariff lines; covering 95.3% of EFTA exports |
| Key Exemptions | Dairy, soya, coal, gold, and select agriculture items excluded |
| Duty-Free Export Benefits | Basmati and non-basmati rice |
| Key Import Benefits | High-value goods like wine, chocolate, and watches |
| Focus on Services | IT, education, healthcare, cultural and professional services |
| Professional Recognition | Provisions for mutual recognition (e.g., nursing, CAs) |
| Negotiation Timeline | Started in 2008, paused post-2013, revived in 2023 |
1. Boost to Bilateral Trade Volumes
With tariff concessions covering nearly all Indian exports, the TEPA is expected to:
- Open lucrative European markets for Indian goods.
- Boost exports in agriculture, apparel, and electronics.
- Increase competitiveness of Indian products through duty-free access.
2. $100 Billion Investment Commitment
The most unique aspect of this FTA is EFTA’s binding commitment to invest $100 billion over 15 years in India, fostering:
- Development in clean energy, biotechnology, and digital infrastructure.
- One million new jobs, particularly in tech and services sectors.
- A stronger foundation for sustainable economic growth.
3. Enhanced Consumer Access to High-Value Imports
Indian consumers can expect more affordable luxury goods:
- Wines and Swiss chocolates
- Designer apparel and premium watches
This not only boosts consumer choice but can also spur demand in retail and hospitality sectors.
4. Services Sector Opportunities
The agreement is designed to unlock new frontiers in service exports:
- IT and fintech professionals may find easier mobility to EFTA countries.
- Educational institutions can explore student exchange, collaborative programs, and digital learning.
- Mutual recognition of professionals will open doors for Indian nurses, engineers, chartered accountants, and legal experts.
5. Balanced Approach to Domestic Interests
India has carefully excluded sensitive sectors like:
- Dairy and soya – protecting domestic farmers and MSMEs.
- Coal – preserving national energy strategies.
- Gold duties remain unchanged – protecting domestic jewelry manufacturing.
Strategic Impact of the Agreement
| Impact Area | Expected Outcome |
|---|---|
| Trade Volume | Increase in both goods and services exports to EFTA markets |
| Foreign Investment | $100B+ inflow over 15 years |
| Employment | 1 million jobs in high-value sectors |
| Agriculture | Boost via duty-free rice exports |
| Services | Growth in IT, education, healthcare, legal, and financial services |
| Imports | Greater availability of high-end European products |
| Technology Transfer | Collaboration in pharma, digital, clean tech, and manufacturing |
Conclusion: A Win-Win for India and EFTA
The India-EFTA TEPA is more than just a tariff-lowering agreement. It’s a comprehensive economic partnership aimed at deepening trade, stimulating investment, and generating employment. With its long negotiation history finally culminating in an ambitious deal, the TEPA reflects a strategic recalibration of India’s trade policy, emphasizing mutual growth, sustainability, and global competitiveness.
As India prepares for implementation in 2025, businesses across sectors must gear up to capitalize on this rare and transformative opportunity.
Glottis Limited 
Leave a comment