The operationalization of the India–European Free Trade Association (EFTA) Trade & Economic Partnership Agreement (TEPA) on October 1, 2025, represents a watershed moment in India’s international trade strategy and economic diplomacy. This comprehensive agreement, culminating from 16 years of rigorous negotiations spanning 21 rounds of discussions, establishes India’s first free trade arrangement with four developed European nations—Switzerland, Norway, Iceland, and Liechtenstein—while pioneering an unprecedented investment-linked trade framework that promises to fundamentally transform bilateral economic relations.

Historic Investment Commitments and Employment Generation

Unprecedented $100 Billion Investment Pledge

TEPA distinguishes itself as the first trade agreement in India’s history to incorporate legally binding investment commitments alongside traditional market access provisions. Under Article 7.1 of the agreement, EFTA states have committed to facilitating $50 billion in foreign direct investment within the first decade of implementation, followed by an additional $50 billion over the subsequent five years, culminating in a total investment commitment of $100 billion over 15 years. This investment framework explicitly excludes foreign portfolio investment, focusing instead on long-term productive capital deployment that will contribute to India’s manufacturing capabilities and technological advancement.

The agreement establishes ambitious employment targets, with EFTA nations committing to facilitate the creation of one million direct jobs in India through these investment flows. Commerce and Industry Minister Piyush Goyal emphasized during the Prosperity Summit that this represents the first instance in international trade history where binding commitments have been made regarding target-oriented investment and job creation. The India-EFTA Desk, operational since February 2025, serves as a single-window platform to monitor and facilitate these investments, particularly in renewable energy, life sciences, engineering, and digital transformation sectors.

Strategic Implementation Framework

The investment commitments are structured to support India’s strategic priorities, particularly the Make in India and Atmanirbhar Bharat initiatives. Minister Goyal highlighted during the official Prosperity Summit that the agreement aligns with India’s philosophy of Antyodaya, ensuring that prosperity reaches the most marginalized sections of society. The structured approach to investment facilitation includes sectoral roadmaps for engineering, pharmaceuticals, food processing, textiles, and marine products, accompanied by comprehensive outreach programs for micro, small, and medium enterprises.

Comprehensive Market Access and Trade Liberalization

Goods Trade Enhancement

EFTA’s market access commitments under TEPA are extensive, covering 92.2% of tariff lines that encompass 99.6% of India’s exports to the bloc. This comprehensive coverage includes 100% of non-agricultural products and significant tariff concessions on processed agricultural products. The agreement provides Indian exporters with substantially improved access across multiple sectors, including machinery, organic chemicals, textiles, and processed foods, thereby enhancing competitiveness and reducing compliance costs.

India’s reciprocal commitments cover 82.7% of tariff lines, accounting for 95.3% of EFTA exports, with careful protection of sensitive sectors including pharmaceuticals, medical devices, processed food, dairy products, and coal. Notably, gold—EFTA’s largest export to India—remains outside the scope of effective duty changes, demonstrating India’s strategic approach to protecting domestic interests while facilitating trade liberalization.

Services Sector Opportunities

The services component of TEPA represents a significant advancement in India’s international trade agreements, with India offering commitments across 105 sub-sectors while securing enhanced access from EFTA nations. Switzerland has committed to 128 sub-sectors, Norway to 114, Iceland to 110, and Liechtenstein to 107 sub-sectors. The agreement particularly strengthens opportunities in information technology services, business services, education, audio-visual services, and cultural sectors—areas where India possesses significant competitive advantages.

The agreement facilitates improved access through multiple service delivery modes, including digital delivery (Mode 1), commercial presence (Mode 3), and enhanced certainty for temporary entry and stay of key personnel (Mode 4). These provisions are expected to significantly benefit India’s services exports, which contribute approximately 55% to the country’s Gross Value Added.

Strategic Export Sector Gains

Manufacturing and Industrial Exports

TEPA provides substantial opportunities for India’s manufacturing sectors, with particular emphasis on machinery, textiles, marine products, and coffee exports. India’s textiles and apparel exports to EFTA, valued at $130 million in 2024, represent significant untapped potential given India’s global textile exports of $36.71 billion. The agreement consolidates duty-free access for leather and footwear products while providing long-term certainty and stability for exporters.

The marine products sector stands to benefit significantly from enhanced access to premium European markets, with Norway eliminating duties up to 13.16% on fish and shrimp feed, while Iceland has removed tariffs up to 10% on frozen, preserved shrimp, prawns, squid, and cuttlefish. Switzerland has implemented zero duty on fats and oils of fish, creating substantial opportunities for Indian marine exporters.

Technology and Innovation Sectors

The agreement facilitates technology collaboration and access to cutting-edge innovations in precision engineering, health sciences, renewable energy, and research and development. Indian electronics exporters, particularly in medical electronics, smart sensors, embedded systems, and secure communication modules, gain enhanced access to sophisticated EFTA markets. The agreement’s intellectual property rights provisions, aligned with TRIPS standards, provide robust protection while safeguarding India’s interests in generic medicines and preventing patent evergreening.

Mutual Recognition Agreements and Professional Mobility

Professional Services Integration

TEPA incorporates provisions for Mutual Recognition Agreements (MRAs) in critical professional services, including nursing, chartered accountancy, and architecture. These arrangements facilitate greater professional mobility between India and EFTA nations, creating new opportunities for skilled Indian professionals to access European markets while contributing to knowledge transfer and capacity building.

The MRAs represent a significant advancement in India’s service sector integration with developed economies, providing Indian professionals with clearer pathways for international practice and career advancement. This component of the agreement directly supports India’s demographic dividend by creating high-skilled employment opportunities for the country’s young, educated workforce.

Official Summit Discussions and Implementation Framework

Prosperity Summit Deliberations

The Prosperity Summit held on October 1, 2025, at Bharat Mandapam in New Delhi, marked the formal operationalization of TEPA with high-level participation from all partner nations. Minister Piyush Goyal, hosting the summit, described the agreement as “a defining moment in India’s economic engagement with Europe” and emphasized its unique nature as a “trusted partnership between friends” built on mutual respect and sensitivities.

The EFTA delegation was comprehensively represented by senior officials including Helene Budliger Artieda, Swiss State Secretary at the State Secretariat for Economic Affairs; Ragnar Kristjánsson, Director General of External Trade and Economic Affairs at the Icelandic Ministry for Foreign Affairs; Christine Lingg, Deputy Director of the Office for Foreign Affairs of Liechtenstein; May-Elin Stener, Ambassador of Norway to India; and Markus Schlagenhof, Deputy Secretary-General of EFTA.

Strategic Partnership Vision

During the summit discussions, Minister Goyal outlined the complementary strengths that each partner brings to the arrangement, describing it as the “Power of Five (Panch)”. India contributes scale, demand, and skilled talent; Switzerland brings precision manufacturing, finance, and capital goods expertise; Norway provides maritime competence and clean energy capabilities; Iceland offers niche clean-tech and digital innovation; and Liechtenstein contributes high-value manufacturing and specialized engineering.

Swiss State Secretary Helene Budliger Artieda emphasized the agreement’s significance beyond legal documentation, describing it as “a win-win partnership” that leverages the complementary nature of Swiss and Indian economies. She highlighted the strong presence of EFTA companies at the summit as evidence of their commitment to participating in India’s growth trajectory.

Business Engagement and Investment Announcements

The Prosperity Summit provided a platform for multiple investment announcements by EFTA companies, reflecting immediate confidence in the partnership framework. Minister Goyal invited businesses from EFTA nations to explore partnerships with Indian companies, assuring them of India’s open, transparent, and investor-friendly environment with 100% foreign direct investment permitted in most sectors of interest.

The summit emphasized the agreement’s role in creating a stable, trusted framework that reduces uncertainty and signals commitment to sustainable growth. Minister Goyal stressed that TEPA extends beyond mere tariff reduction to establish comprehensive economic integration that benefits businesses and workers on both sides.

Economic Impact and Future Outlook

Transformative Economic Integration

The combined GDP of India and EFTA states represents approximately $5.4 trillion, providing substantial scale for deeper economic integration. India’s position as the world’s fastest-growing large economy, on course to become the third largest globally, combined with EFTA’s collective leadership in merchandise and services trade, creates a powerful foundation for sustained economic cooperation.

The agreement is designed to deliver substantial and long-lasting benefits, including more resilient and better-integrated supply chains, increased trade and investment flows, expanded employment opportunities, and sustained economic growth. Implementation focuses on enhancing market access, streamlining customs procedures, and creating an environment where Indian and EFTA businesses can innovate, expand, and prosper.

Strategic Positioning in Global Trade

TEPA represents India’s strategic positioning to engage with developed economies from a position of strength and confidence. Following successful free trade agreements with Australia and the UAE, the EFTA partnership demonstrates India’s capacity to negotiate complex, comprehensive agreements that balance domestic interests with international market access. The agreement’s emphasis on sustainable development, inclusive growth, and environmental protection establishes it as a model for future trade partnerships.

The operationalization of TEPA on October 1, 2025, marks not merely the beginning of enhanced trade relations but the foundation of a transformative economic partnership that will benefit generations of Indians and Europeans. With its unprecedented investment commitments, comprehensive market access provisions, and innovative approach to trade facilitation, TEPA establishes a new paradigm for India’s engagement with the global economy while reinforcing the country’s commitment to building prosperity that reaches every segment of society.