The Free Trade Agreement of India with EFTA Nations

Application & Meaning:

• The Trade and Economic Partnership Agreement (TEPA) of India with European Free Trade Association (EFTA) comes into effect on 1 st October 2025 .
• This is the first FTA between India and a European union , which is a combination of Switzerland, Norway, Iceland, and Liechtenstein .
• The agreement is expected to boost trade, investment and technology cooperation between India and these high-income European countries.

Basic Elements of the Accord:

• Market Access: Gives phased tariff cuts on goods and enhanced access to services.
• Investment Conistence: EFTA countries would commit to invest 100 billion dollars in India over a period of 15 years which would help in the transfer of technology and skills.
• Sectoral Benefits: Pharmaceuticals, textiles, gems and jewellery , auto parts, and chemicals are some of the key Indian export industries, which are getting preferential market access.
• Safeguards: Defends domestic sectors that are sensitive such as agriculture and dairy .

Expected Economic Impact:

• Potential of creating employment opportunities of up to 1 million with new investments and growth in exports.
• Will contribute to the integration of India in the European supply chains especially in pharmaceuticals, engineering and clean technology.
• Promotes R&D cooperation, startup capital and green production .

Strategic Alignment:

• Supports the vision of India to become a 5 trillion economy .
• Conforms with the current trade agreements with UAE and Australia .
• Favours internal reforms such as Production Linked Incentive (PLI) programs, GST simplification, and infrastructure improvements .