India has achieved a historic milestone with the India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA), which came into effect on October 1, 2025. This agreement marks India’s first Free Trade Agreement (FTA) with four developed European nations — Switzerland, Norway, Iceland, and Liechtenstein — and sets binding commitments for both investment and employment. The TEPA commits Rs. 8,87,100 crore (US$ 100 billion) in investments and the creation of one million direct jobs over the next 15 years, making it the first Indian FTA with such binding targets.

The agreement offers extensive market access for Indian exports. EFTA has agreed to reduce tariffs on 92.2% of products, representing 99.6% of India’s exports, while India has opened its market to 82.7% of EFTA products, covering 95.3% of EFTA’s exports. Certain sensitive sectors — including dairy, soya, coal, pharmaceuticals, and agriculture — are protected either through exclusions or phased tariff reductions to ensure domestic stability.

Beyond goods trade, TEPA facilitates enhanced trade in services, professional mobility, and Mutual Recognition Agreements (MRAs) in professions such as nursing, accountancy, and architecture, opening up opportunities for skilled Indian professionals in EFTA countries.

The pact is expected to unlock substantial opportunities across key sectors, including machinery, engineering goods, processed foods, marine products, electronics, chemicals, textiles, and gems and jewellery. The zero-duty concessions provided by EFTA, particularly in processed foods, marine products, and engineering goods, are projected to enhance India’s export competitiveness and strengthen the country’s position in global value chains.

The Rs. 8,87,100 crore (US$ 100 billion) investment commitment is set to accelerate domestic manufacturing, technology adoption, innovation, and job creation, directly supporting India’s Make in India and Atmanirbhar Bharat missions. TEPA’s focus on technology collaboration, intellectual property protection, and sustainability aligns India’s trade policy with long-term economic goals, ensuring inclusive and sustainable growth.

By blending market access with strategic investment and employment commitments, TEPA positions India as a trusted global trade partner, boosting confidence among foreign investors while creating significant opportunities for domestic industry and skilled professionals. Analysts view the agreement as a game-changer that strengthens India-EFTA economic ties, promotes technology transfer, and underscores India’s commitment to a sustainable, inclusive, and innovation-driven economy.

With TEPA, India demonstrates its ability to leverage trade agreements for strategic industrial development, export diversification, and job creation, reaffirming its leadership in global trade negotiations and reinforcing its position as a preferred destination for foreign investment. The pact is poised to be a key driver of economic growth, competitiveness, and long-term prosperity for India over the next decade and beyond.

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