India and EFTA signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024. The agreement entered into force on October 1, 2025. It is India’s first free trade agreement (FTA) with four developed European nations.
The TEPA commits to investing US$100 billion (USD) over 15 years and creating 1 million direct jobs. This is India’s first FTA to contain such a binding commitment.
The agreement covers 92.2 percent of product entries on EFTA’s official customs list (99 percent of Indian exports). It covers 82.7 percent of product entries on India’s customs list (95.3 percent of EFTA exports), protecting key sectors such as dairy, soy, coal, and agriculture.
This agreement will expand market access, boost manufacturing and innovation, and strengthen cooperation in technology and sustainability.
Services exports will benefit from digital delivery, commercial presence and professional mobility, and mutual recognition agreements (MRAs) in sectors such as nursing, accountancy, and architecture.
NEW DELHI 12/10/2025 SANTOSH SETH
The India-EFTA Trade and Economic Partnership Agreement (TEPA) is a historic milestone, India’s first free trade agreement with four developed European countries.
It is expected to generate US$100 billion in investment and 1 million direct jobs over the next 15 years. The agreement will enhance market access for goods and services and strengthen intellectual property rights. It promotes sustainable and inclusive growth, furthering the goals of Make in India and Atmanirbhar Bharat.
A defining moment in India-Europe economic relations
The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) was signed in New Delhi on March 10, 2024.
This agreement, which will come into effect on October 1, 2025, will be a defining moment in India’s foreign trade policy.
What is EFTA?
“EFTA is an intergovernmental organization of Iceland, Liechtenstein, Norway, and Switzerland. It was established in 1960 by its then seven member countries to promote mutual free trade and economic integration. EFTA is one of the three major economic blocs in Europe (the other two being the European Union and the UK)”
This is India’s first free trade agreement with four developed European countries: Switzerland, Norway, Iceland, and Liechtenstein, and one of the most economically ambitious agreements in the world.
It is one of the most ambitious agreements in terms of scale and purpose. It symbolizes the strategic convergence of the vision of a self-reliant India and EFTA’s pursuit of strong and diversified partnerships.
The agreement comprises 14 chapters, focusing on key areas such as market access for goods, rules of origin, trade facilitation, trade reforms, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, services, intellectual property rights, trade and sustainable development, and other legal and anti-competitive provisions.
The main objective of this agreement is to attract $100 billion in investment to India over the next fifteen years and create one million direct jobs. It is one of the most progressive trade partnerships in the country’s economic history.
Key Features of TEPA : Purposeful Investment
What is TEPA?
TEPA (Trade and Economic Partnership Agreement) is a modern and ambitious agreement that, for the first time in any free trade agreement (FTA) signed by India, expresses a binding commitment to investment and job creation.
Under Article 7.1, the four EFTA member countries have pledged to increase foreign direct investment (FDI) in India to $50 billion in the first 10 years and an additional $50 billion in the next five years.
Unlike portfolio flows, these are long-term, capacity-building investments that focus on manufacturing, innovation, and research.
Over time, these are expected to create one million direct jobs and foster deeper ties between India’s skilled workforce and Europe’s technology ecosystem.
To streamline investment facilitation, a dedicated India-EFTA desk has been launched from February 2025, serving as a single-window platform for potential investors.
It has a special focus on renewable energy, life sciences, engineering, and digital transformation, while also promoting joint ventures and collaboration with small and medium-sized enterprises.
Balanced Market Access
TEPA strikes a balance between ambition and prudence. EFTA offers tariff concessions on 92.2 percent of product entries, covering 99.6 percent of India’s exports. This will cover all non-agricultural goods and processed agricultural products.
In return, India has granted access to 82.7 percent of product entries, representing 95.3 percent of EFTA exports, with strict safeguards. Over 80 percent of imports from EFTA are gold imports, where effective duties remain unchanged.
Sensitive sectors such as dairy, soy, coal, pharmaceuticals, medical devices, and select food products are excluded from this list.
For products covered under key programs such as Make in India and the Production-Based Incentive (PLI) scheme, customs duty reductions are being phased in over 5-10 years. This gives domestic industries time to strengthen before facing competition.
The India-EFTA Trade and Economic Partnership Agreement opens up numerous opportunities for Indian industries. With 92 percent of product entries covered in EFTA, Indian exporters will gain access to EFTA markets in sectors such as machinery, organic chemicals, textiles, and processed foods.
This is expected to increase competition, reduce costs, and accelerate the entry of Indian products into those markets.
Agriculture and Allied Goods
India’s exports to EFTA countries in FY 2024-25 will be $72.37 million, with guar gum, processed vegetables, basmati rice, pulses, fruits, and grapes leading the way.
TEPA has reduced or eliminated customs duties in these categories, particularly in Switzerland and Norway, which account for over 99% of India’s agricultural trade with EFTA.
Benefits to Each Country
Switzerland
Norway
Iceland
The EFTA countries together import coffee worth $175 billion, representing approximately 3% of global trade.
The elimination of duties on all coffee categories will increase Indian producers’ access to the premium markets of Switzerland and Norway, ideal destinations for shade-grown and hand-picked Indian coffee.
For tea, the small but high-value EFTA market (approximately 3 million kg per year) is already showing benefits, with India’s average exports expected to increase to $6.77 per kg in 2024-25 from $5.93 per kg last year.
Seafood Products
Under TEPA, Indian marine products will benefit from tariff concessions in EFTA countries:
Norway
Duty reduction of up to 13.16% on fish and shrimp feed, making Indian products more competitive and increasing exports of feed and raw materials.
Iceland
Customs duties on frozen, prepared, and preserved shrimp, prawns, squid, and cuttlefish will be eliminated by up to 10%, and fish feed will be reduced by up to 55%.
Switzerland
Zero duty on fish fat and oil (except liver oil).
Industrial and Manufacturing Benefits
Exports of engineering goods to EFTA countries amounted to $315 million in fiscal year 2024-25, an 18% increase over the previous year.
The agreement will expand market access for electrical machinery, copper products, energy-efficient systems, and engineering.
Textiles and apparel, valued at $0.13 billion, and leather and footwear will benefit from duty freezes and standard simplification, while sporting goods and toys will benefit from duty elimination and mutual agreement on conformity standards.
Gems and jewellery are exempt from duty in TEPA across all EFTA countries, ensuring long-term predictability for exporters of diamonds, gold, and colored gemstones.
Electronics and Software
With a commitment of US$100 billion in investments and access to high-income European markets, TEPA will create a strategic base for India’s electronics sector—especially for MSMEs and OEMs looking to expand globally.
Market Potential by Country
Switzerland
Medical electronics (diagnostic equipment, wearable devices), smart sensors and embedded systems, secure communication modules (for fintech and banking).
Strategic Advantage: Leverage TEPA’s IPR chapter to protect proprietary technology.
Norway
Electric vehicle components and battery management systems, marine electronics (navigation, sonar, instruments), smart grids, and energy monitoring equipment.
Strategic Advantage: Alignment with Norway’s climate-tech goals and public procurement channels.
Iceland
Compact medical equipment and diagnostics, smart home and energy-efficient electronics, educational technology hardware (tablets, sensors).
Strategic Advantage: Targeting Specialized Distributors and Public Health Initiatives
Liechtenstein
EFTA has eliminated or reduced customs duties on 95% of India’s chemical exports, reducing tariffs by up to 54% from pre-FTA tariffs.
Exports are projected to increase from $49 million to $65-70 million, particularly in pet food, rubber, ceramics, and glassware.
For plastic and lacquer products, TEPA enables diversification into high-value European markets, reducing dependence on high-tariff countries like the United States.
A Partnership Based on Mutual Trust
TEPA is more than a trade agreement for India; it is a tool of strategic trust with like-minded economies that value transparency, rules-based trade, and innovation.
It also reflects a mature approach to trade liberalization, positioning India as a reliable partner in global supply chains while protecting the country’s interests.
By opening up investment, employment, technology, and sustainability, TEPA exemplifies a modern economic partnership that is ambitious, balanced, and visionary.
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