India’s trade agreement with the European Free Trade Association (EFTA) will take effect from October 1, 2025, paving the way for $100 billion in foreign direct investment and the creation of 1 million jobs over the next 15 years, according to the Ministry of Commerce and Industry. The Trade and Economic Partnership Agreement (TEPA), signed in March 2024 in New Delhi, is India’s first pact with European nations to combine market access with binding commitments on investment and employment, the Ministry said in a Press Information Bureau release.
A first-of-its-kind free trade pact
Officials described TEPA as a “modern and ambitious” agreement that extends beyond goods and services to long-term investment. Under Article 7.1, EFTA states – Switzerland, Norway, Iceland and Liechtenstein, will aim to bring in $50 billion of foreign direct investment within the first 10 years of the pact and a further $50 billion in the next five years. The investment commitment, equivalent to nearly Rs 8 lakh crore, explicitly excludes foreign portfolio flows and is focused on building productive capacity.
The Ministry noted that the agreement is designed to generate 1 million direct jobs, particularly for India’s young workforce, by boosting manufacturing, services and technology-driven industries.
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Market access for goods and services
EFTA has offered duty-free access on 92.2 per cent of its tariff lines, covering 99.6 per cent of India’s exports. This includes all non-agricultural products as well as processed agricultural goods such as biscuits, rice, confectionery and fresh produce.
India has extended concessions on 82.7 per cent of tariff lines, accounting for 95.3 per cent of EFTA exports. Sensitive areas such as dairy, soya, coal, medical devices, pharmaceuticals and select food items have been shielded. Notably, gold – which constitutes over 80 per cent of EFTA exports to India –Â remains outside any new tariff cuts, preserving the current duty structure.
Boost to trade and technology collaboration
India’s services sector, which contributes more than half of the country’s economic output, is expected to be a major beneficiary of TEPA. The pact secures improved access in information technology, business services, cultural industries, education and audio-visual sectors.
It also creates avenues for Indian professionals in nursing, chartered accountancy and architecture through Mutual Recognition Arrangements (MRAs). Greater certainty has been built in for digital delivery of services, commercial presence and the temporary movement of skilled personnel.
Strengthening intellectual property and sustainability
The agreement includes a chapter on intellectual property rights (IPR) at World Trade Organization (TRIPS) levels. The Ministry said TEPA would support India’s efforts to upskill its workforce and foster technology partnerships in areas such as renewable energy, health sciences, precision engineering and research and development.
Significance of the pact
TEPA is expected to open fresh opportunities across a wide spectrum of Indian exports. Coffee producers will gain duty-free access to Switzerland, Norway and Iceland, valued markets with combined imports of $175 million. Tariffs have also been eliminated for basmati rice, guar gum, processed food items, fresh grapes and nuts, which are expected to improve India’s competitiveness against rivals.
Marine products such as prawns, squid and fish feed will benefit from tariff cuts of up to 55 per cent in Iceland and exemptions in Norway. Textile exporters, who currently sell only $130 million worth of goods to EFTA, will be able to leverage tariff concessions to expand their presence. According to the officials, the agreement will help diversify India’s engineering exports into areas like electric machinery, precision equipment, aluminium and copper products. Gems and jewellery, which already enjoy duty-free treatment, will continue to hold strong potential in Switzerland and Norway.
