India-EFTA Trade Pact To Unlock $100 Billion Investments, 1 Million Jobs Over 15 Years
On October 1, the landmark India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) will officially come into effect, marking a historic milestone in India’s trade diplomacy. Signed on March 10, 2024, in New Delhi, the agreement is being hailed as India’s most ambitious free trade deal to date – one that not only opens markets but also commits to long-term investments and job creation.
For the first time in any free trade agreement signed by India, TEPA incorporates a binding investment and employment commitment. Under Article 7.1, EFTA states – Switzerland, Norway, Iceland, and Liechtenstein – will aim to bring in $100 billion in foreign direct investment into India over the next 15 years, creating 1 million direct jobs. Significantly, this investment excludes foreign portfolio inflows, focusing instead on long-term capital for capacity building, technology transfer, and innovation.
“This is not just about lowering tariffs. It is about shaping the future of India’s economy by anchoring investment, skills, and technology partnerships with four developed economies,” said a senior official from the Ministry of Commerce and Industry.
A Modern, Comprehensive Pact
The agreement spans 14 chapters, covering market access for goods and services, rules of origin, trade facilitation, sanitary and phytosanitary measures, technical barriers to trade, intellectual property rights, sustainable development, and investment promotion.
On goods, EFTA has offered duty concessions on 92.2% of tariff lines, covering nearly all of India’s exports, including machinery, textiles, organic chemicals, processed food, and marine products. In return, India has opened 82.7% of its tariff lines, covering 95.3% of EFTA exports – although crucially, imports of gold (over 80% of EFTA’s exports to India) remain unaffected in terms of duty. Sensitive sectors like dairy, medical devices, processed food, and coal have been safeguarded with phased tariff reductions.
On services, India has secured improved access across 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland. These include IT, business and professional services, cultural and audio-visual services, and education. TEPA also creates pathways for Mutual Recognition Agreements (MRAs) in professional fields such as nursing, chartered accountancy, and architecture – expanding opportunities for Indian professionals abroad.
Boost for Exports and Technology
For India’s exporters, TEPA is set to open doors to some of Europe’s wealthiest markets. From processed food and marine products to engineering goods, textiles, gems, and jewellery, tariff reductions and simplified trade procedures are expected to boost competitiveness.
The agricultural sector is expected to gain from concessions on basmati rice, guar gum, fresh fruits, mangoes, and nuts, while coffee and tea exporters anticipate stronger positioning in premium markets like Switzerland and Norway. Marine exports, particularly shrimps and prawns, will see tariff elimination of up to 55%.
Technology and precision engineering also stand to benefit. TEPA provides a strategic platform for India to collaborate with EFTA nations on renewable energy, EV components, health sciences, and R&D innovation. For Indian MSMEs, especially in electronics and software, the pact offers opportunities to integrate into high-value European supply chains.
A Sustainable Partnership
Beyond trade, TEPA emphasizes sustainable and inclusive development, including commitments to social progress, environmental protection, and vocational training. By aligning investment flows with green growth and renewable technologies, the agreement is expected to create a future-ready partnership.
A dedicated India-EFTA Desk, operational since February 2025, will act as a single-window facilitation mechanism for investors. It will streamline regulatory processes, support joint ventures and SME collaborations, and foster continuous dialogue between businesses and governments.
Why It Matters
EFTA may be a smaller bloc compared to the EU, but its members are among the world’s most advanced economies. Switzerland alone is India’s largest trading partner within EFTA, followed by Norway, both with strong potential in sectors ranging from finance and engineering to food and health sciences.
With TEPA, India is not only securing improved market access but also positioning itself as a global hub for investment and innovation. For the country’s young workforce, the promise of 1 million jobs coupled with enhanced skill development makes this more than just a trade deal—it is an opportunity to shape the next phase of India’s growth story.
As Commerce Minister Piyush Goyal remarked at the signing ceremony last year, “TEPA is a modern and ambitious Trade Agreement. For the first time, India is signing FTA with four developed nations – an important economic bloc in Europe. For the first time in history of FTAs, binding commitment of $100 billion investment and 1 million direct jobs in the next 15 years has been given. The agreement will give a boost to Make in India and provide opportunities to young & talented workforce. The FTA will provide a window to Indian exporters to access large European and global markets.”
When TEPA takes effect on October 1, 2025, it will mark the beginning of a new chapter in India’s engagement with Europe – one built not just on goods and services, but on shared prosperity, technology, and sustainable growth.
