TEPA-EFTA Trade and Economic Partnership Agreement

1. Simple Agreement & Implementation.

• The Trade and Economic Partnership Agreement (TEPA) of India with the European Free Trade Association (EFTA) will be in effect on October 1, 2025.
• Switzerland, Norway, Iceland and Liechtenstein are EFTA members.
• It is the first FTA that India has had with a European bloc.

2. Core Objectives

• Improve trade, investment and economic cooperation.
• Encourage the transfer of technology and skills.

3. Highlights of the Accord.

• Trade: Progressive elimination of tariffs on goods and improved market access to services, investments and intellectual property rights (IPR).
• Investment: EFTA countries have undertaken to invest USD 100 billion in India in 15 years.
• Employment: It is estimated that around 1 million jobs will be generated in India through this investment.

4. Strategic Significance to India.

• Opens up high value European markets.
• Increases exports of major Indian industries such as pharmaceuticals, textiles, chemicals, gems and jewellery and auto parts.
• Helps involve Indian industries in European supply chain, particularly in pharma, engineering and clean technology.
• Promotes R&D and start up capital.

5. Challenges & Protections

• Vulnerable industries such as agriculture and dairy are not exposed to immediate market entry.
• The possible pitfalls are the treatment of trade imbalances and the preparedness of MSMEs to realize the benefits of the agreement.

6. Consistency with Greater Economic Vision.

• Embraces the aspirations of India to emerge as USD 5 trillion economy and global manufacturing center.
• Supplements other recent FTAs (e.g., with UAE, Australia) and is harmonized with domestic reforms such as PLI schemes and GST.