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Following sixteen years of continuous negotiations that started in 2008, India and the European Free Trade Association (EFTA) finally signed a historic trade agreement. The Trade and Economic Partnership Agreement (TEPA) was signed on 10th March 2024. The deal will come into force on October 1, 2025.
The historic agreement is one of India’s largest trade alliances, with four affluent European countries in a win-win economic partnership. The protracted negotiation cycle, over several governments and economic cycles, illustrates the seriousness and complexity both parties had in getting this deal correct.
What they produced is more than a conventional free trade agreement, but a full-fledged economic partnership that has the potential to redefine India-Europe trade relations for years to come.
The European Free Trade Association comprises four economically developed countries: Switzerland, Norway, Iceland, and Liechtenstein. Though not as numerous as the European Union, these nations are great economic powerhouses with combined technology, financial services, pharmaceuticals, and precision manufacturing expertise. Switzerland, as India’s largest trading partner among the EFTA states, stands to benefit considerably from the agreement, with bilateral trade totalling over EUR 4.3 billion in 2024.
The Trade and Economic Partnership Agreement is more than traditional trade arrangements since it includes large investment pledges together with the usual tariff cuts. It includes a US$100 billion investment pledge over 15 years (US$50 billion in the first 10 years and US$50 billion in the following 5 years). However, the agreement text frames this as an objective the parties will “aim to” achieve, not an unconditional guarantee.
The hybrid nature of TEPA sets it apart among India’s current free trade agreements. The pact has fourteen chapters that touch on everything from trade in goods and services to intellectual property protection, digital trade, safeguard, rules of origin and best practices in sustainable development.
In contrast to other trade agreements that address primarily the lowering of barriers, TEPA contains concrete, legally enforceable investment commitments of EFTA nations. This groundbreaking design allows India to receive ensured capital inflows while granting EFTA nations preferential access to one of the fastest-growing consumer markets in the world.
India’s government strategy for TEPA is part of wider strategic goals in different policy documents. The agreement is compatible with the “Make in India” initiative through drawing foreign investment in manufacturing and is also in line with the “Digital India” agenda through more opportunities for services trade.
TEPA was put in the spotlight of Indian economic diplomacy by the Ministry of Commerce and Industry as it is vital in the process of integrating Indian companies into the global value chains. The agreement facilitates the government vision to become a 5 trillion economy through transfer of technology, creation of employment and exports, which are boosted.
For EFTA, the agreement is a strategic point of entry into the Indian market, which is expected to be the third-largest economy in the world by 2030. The four EFTA nations view India as a large consumer market as well as a production hub for other markets in Asia.
India inaugurated the exclusive EFTA Desk on February 10, 2025, with the sole purpose of helping and supporting investors from EFTA countries investing in India. It acts as a single point of contact to deal with investor grievances, resolve any issues that can occur, and has an extensive database of investment opportunities. This institutional support system demonstrates a strong commitment to effective implementation of the agreement.
The deal encompasses a wide variety of products, with India pledging to remove tariffs on more than 90 per cent of EFTA exports. It will be phased out over time to give Indian industries space to adapt to enhanced competition while rewarding consumers with lower prices on foreign products. Some of the major product groups include:
Significantly, the deal leaves gold imports out of tariff cuts, in response to Switzerland’s appeal but safeguarding India’s domestic jewelry industry and fiscal interests.
EFTA states have committed to eliminating customs duties on imports of industrial products, as well as fish and other marine products, originating in India.
India offered 105 sub-sectors to EFTA, while Switzerland alone committed in 128 sub-sectors, where India has promised market access. This is one of the freest services commitments India has ever made in any trade deal. The agreement includes provisions to facilitate market access to India’s services sector an area of growing importance to Swiss companies, particularly those in finance, insurance and consulting.
The agreement will allow for the mobility of skilled professionals, especially in information technology, engineering, and healthcare sectors. Indian professionals will have the advantages of simplified visa procedures and qualification recognition, presenting new employment opportunities in European markets.
This is not full labour migration; it is limited to defined categories such as intra-company transfers and contractual service suppliers.
The foundation of TEPA is the 15-year, $100 billion investment pledge by EFTA nations. The investment will be front-loaded, with $50 billion to be allocated during the initial 10 years and the balance of $50 billion during the next five years. Investment priorities are as follows:
The Parties to TEPA have agreed to accord each other National Treatment (NT) in areas such as the trade in goods (incorporating the standards under the WTO General Agreement on Tariffs and Trade 1994 (GATT)) and to accord each other Most-Favoured-Nation (MFN) treatment with respect to customs duties on imports and the supply of services (incorporating Article II of the WTO General Agreement on Trade in Services (GATS).
| Area | What it Covers | Global Impact |
|---|---|---|
| Market Access | Tariff concessions, quotas, and non-tariff barrier reduction. | Expands export opportunities, lowers import costs, and improves consumer choice. |
| Rules of Origin | Criteria to qualify goods for FTA benefits. | Ensures genuine trade benefits, prevents third-country diversion, and affects supply chains. |
| Trade Facilitation | Faster, simpler customs & border processes. | Cuts transaction costs, reduces delays, and benefits SMEs and global trade efficiency. |
| Investment Promotion | Provisions to attract and ease FDI. | Creates jobs, fosters technology transfer, and boosts cross-border capital flows. |
| IPR | Standards for patents, trademarks, copyrights, GIs. | Encourages innovation, protects creators, but may affect access to medicines/knowledge. |
| Trade in Services | Market access for IT, finance, and education professionals. | Supports the growth of service economies and enhances the mobility of skilled workers. |
| Trade Remedies | Anti-dumping, countervailing duties, safeguards. | Protects industries from unfair trade and ensures fair competition globally. |
| SPS Measures | Food, animal, plant health & safety standards. | Protects consumers and ecosystems, ensuring science-based, safe trade in agricultural products. |
| Trade & Sustainable Development | Labour rights, environment, and climate cooperation. | Promotes ethical trade, responsible supply chains, and sustainable growth. |
| Government Procurement | Rules on government purchasing. | Opens public contracts to competition, improves transparency and value for money. |
| Competition | Policies against anti-competitive practices. | Prevents monopolies/cartels, fosters a fair global business environment. |
| Dispute Settlement | Mechanisms for resolving disagreements. | Provides predictability, stability, and enforcement in trade relations. |
| Other Provisions | Legal, institutional, SME, e-commerce, cooperation. | Supports smooth functioning, adaptation, and modernisation of agreements. |
| Rules of Origin | Criteria to qualify goods for FTA benefits. | Ensures genuine trade benefits, prevents third-country diversion, and affects supply chains. |
| Trade Facilitation | Faster, simpler customs & border processes. | Cuts transaction costs, reduces delays, benefits SMEs and global trade efficiency. |
| Investment Promotion | Provisions to attract and ease FDI. | Creates jobs, fosters technology transfer, and boosts cross-border capital flows. |
India and the EFTA states agree to provide each other’s investors with certain reciprocal benefits:
TEPA provides general commitments to a favourable investment climate but does not include strong, binding investor protections (e.g., no ISDS mechanism). This is why Switzerland is negotiating a separate bilateral investment treaty (BIT) with India to fill those gaps.
While TEPA includes digital trade provisions, the rapidly evolving nature of e-commerce and digital services means that additional protocols and updates may be necessary to address:
The manufacturing sector offers significant opportunities, particularly in:
The focus of the agreement on cooperation in research and development will drive technological innovation in both blocs. Collective research efforts in renewable energy, biotechnology, and digital technologies will generate intellectual property and innovative solutions for the global market.
With 128 sub-sectors opened for market access, opportunities exist in:
TEPA makes India a more integrated player in international supply chains, especially between Asia and Europe. Indian integration will make it a bigger player in international trade and give the EFTA member states strategic access to markets in Asia. The agreement can also act as a model for future trade agreements, showing the way investment commitments can be combined with conventional trade liberalization elements.
India and EFTA states have pledged to put the agreement into action in ways consistent with sustainable development goals. This encompasses enhancing sustainable environmental-friendly technologies, inclusive economic expansion, and ensuring that the benefits of trade trickle down to all sectors of society.
The agreement contains special provisions regarding cooperation on climate change mitigation and sustainable business practices, an indication of the increasing significance of environmental concerns in international commerce.
Phase-wise implementation schedule
| Phase 1 (2025-2027) | Initial tariff reductions and establishment of institutional frameworks |
| Phase 2 (2028-2032) | Major investment flows and deeper market integration |
| Phase 3 (2033-2040) | Full implementation of investment commitments and comprehensive market access |
The India–EFTA Trade and Economic Partnership Agreement is more than just a trade deal it’s a step towards a new era of global cooperation. For India, it opens doors to fresh investments, advanced technologies, and wider access to European markets, giving both businesses and professionals a chance to grow. For EFTA countries, it provides a gateway into one of the world’s largest and fastest-growing consumer economies, along with opportunities to build cost-effective production bases in Asia.
Of course, the agreement also brings challenges. Investor protections are still limited, and businesses will need to tread carefully with smart strategies. The real test lies in how well both sides implement the deal, simplify regulations, and support companies in making the most of these opportunities.
If managed well, TEPA could become a model for future global partnerships showing how developed and emerging economies can work together to achieve shared prosperity. With years of negotiations already behind it and continued efforts to iron out practical challenges, the foundation is strong for a partnership that can shape long-term growth for both India and EFTA nations.
