India-EFTA trade deal completes two years, targets $100 billion investment

Two years after the signing of the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) nations, the partnership has moved from negotiation to implementation with effect from 1 October 2025.

The agreement aims to boost trade, investment, services, technology collaboration and long-term industrial growth between India and group of advanced European economies.

The countries that come under EFTA are Iceland, Liechtenstein, Norway and Switzerland.

Highlighting the broader trade strategy, PM Modi said India has built a strategic and purposeful network of Free Trade Agreements. We now have FTAs with 38 partner nations, an unprecedented milestone in India’s trade history. This gives our manufacturers and producers enough diversity and depth to sell our products across many markets.

"These FTAs have opened up the markets of major economies to India’s manufactured products. For instance, the India-UK FTA and the India-EU FTA will eliminate tariffs on 99 percent of our exports to these countries. Merchandise trade with both Australia and the UAE has doubled since the signing of FTAs with these countries," he added.

For MSMEs and startups, the agreement opens pathways for technology transfer, joint ventures and collaboration with niche technology firms from EFTA countries, helping Indian enterprises move up the value chain and strengthen their global competitiveness.

Within TEPA, EFTA’s commitments cover 92.2 per cent of tariff lines, accounting for 99.6 per cent of India’s exports, including full coverage of non-agricultural products and tariff concessions on processed agricultural products. India’s commitments cover 82.7 per cent of tariff lines, accounting for 95.3 per cent of EFTA exports.

For India, the significance of TEPA lies in both market access and capability building. The agreement strengthens India’s export presence in high purchasing power markets securing binding commitments across pharmaceuticals, textiles and garments, engineering goods, chemicals, processed foods and marine products.

At the same time, it improves access to specialised intermediate goods, advanced machinery, precision components and selected high-standard industrial products that can support production efficiency, product quality and integration with global supply chains.

Furthermore, the agreement includes an investment commitment of USD 100 billion over 15 years and facilitation of one million direct jobs.

This investment dimension gives TEPA a wider economic role by linking trade opening to manufacturing capacity, technology partnerships, research and development, renewable energy, life sciences, engineering and digital transformation.