India–EFTA Trade Pact Marks Two Years, Targets $100B Investment

The agreement aims to expand trade, investment, technology collaboration and industrial partnerships between India and some of Europe’s most advanced economies.

Two years after the signing of the India–EFTA Trade and Economic Partnership Agreement (TEPA), the landmark trade pact between India and the European Free Trade Association (EFTA) countries—Iceland, Liechtenstein, Norway and Switzerland—has moved from negotiation to implementation, coming into effect on 1 October 2025. The agreement aims to expand trade, investment, technology collaboration and industrial partnerships between India and some of Europe’s most advanced economies.

Part of India’s Expanding Global Trade Network

Highlighting India’s growing trade partnerships, Prime Minister Narendra Modi said the country has built a strong network of Free Trade Agreements (FTAs) with 38 partner nations, marking an unprecedented phase in India’s trade history.

“These agreements span continents and include countries of varying economic strength. This diversity allows Indian manufacturers and producers to access multiple markets and expand their global reach,” the Prime Minister said.

He noted that recent trade agreements—including those with Australia and the UAE—have already resulted in significant growth in merchandise trade, while upcoming agreements such as the India–UK and India–EU FTAs are expected to eliminate tariffs on 99% of Indian exports to those markets.

TEPA Opens High-Income European Markets

On the second anniversary of the agreement, Union Commerce and Industry Minister Piyush Goyal said the India–EFTA partnership is designed with a long-term economic vision.

“India–EFTA TEPA gives Indian exporters access to high-income markets and creates an investment pathway of USD 100 billion over 15 years, while also improving access to specialised machinery, quality inputs and technology partnerships that can strengthen manufacturing in India,” Goyal said.

He added that the agreement will help India build manufacturing scale, improve product standards and move closer to its export targets for 2030.

Major Market Access for Indian Exports

Under TEPA, EFTA countries have agreed to provide significant tariff concessions to India:

• 92.2% of tariff lines covered by EFTA commitments

• These account for 99.6% of India’s exports to EFTA countries

• Full coverage for non-agricultural products

• Tariff concessions on processed agricultural products

In return, India will offer concessions covering:

• 82.7% of tariff lines

• Accounting for 95.3% of EFTA exports to India

However, sensitive sectors such as dairy, soya, coal and select agricultural products remain protected, while the effective duty on gold remains unchanged.

Boost to Manufacturing and Supply Chains

The agreement is expected to strengthen India’s position in high-value export sectors, including:

• Pharmaceuticals

• Textiles and garments

• Engineering goods

• Chemicals

• Processed food products

• Marine exports

At the same time, India will gain better access to advanced machinery, precision components and specialised industrial inputs, helping domestic industries upgrade production processes and integrate into global supply chains.

$100 Billion Investment Commitment

A key feature of the agreement is its investment component, under which EFTA countries have committed to facilitate USD 100 billion in investments over 15 years, potentially generating around one million direct jobs in India.

These investments are expected to support sectors such as:

• Renewable energy

• Life sciences

• Advanced manufacturing

• Engineering and precision technology

• Research and development

• Digital transformation

Opportunities in Services and Professional Mobility

The TEPA also expands opportunities in India’s services sector, which remains one of the country’s strongest global competitive advantages.

The agreement enables:

• Cooperation in IT and IT-enabled services

• Growth in professional and knowledge-based services

• Mutual Recognition Agreements (MRAs) in professions such as nursing, chartered accountancy and architecture

• Greater certainty for temporary movement of professionals and key personnel

These provisions are expected to enhance India’s position as a global hub for services and Global Capability Centres (GCCs).

Benefits for MSMEs, Start-ups and Farmers

The agreement is expected to create new opportunities for MSMEs, start-ups, farmers and fishermen, enabling them to access premium European markets.

Several Indian states could benefit from expanded exports, including:

• Maharashtra: grapes

• Karnataka: coffee

• Kerala: spices and seafood

• North-Eastern states: horticulture products

The partnership also opens pathways for technology transfer, joint ventures and collaborations with niche technology firms in EFTA countries, helping Indian companies move up the value chain.

Supporting India’s $2 Trillion Export Vision

The agreement supports India’s broader trade objective of reaching USD 1 trillion in merchandise exports and USD 1 trillion in services exports by 2030.

By combining market access, investment flows and industrial cooperation, TEPA is expected to strengthen India’s export competitiveness and deepen integration with advanced global markets.

Officials said India and EFTA countries will continue to work through institutional mechanisms, business partnerships and stakeholder consultations to ensure the agreement translates into greater trade flows, stronger investments and deeper economic collaboration.