India’s Trade and Economic Partnership Agreement with the European Free Trade Association has moved from negotiation to implementation, marking a major step in India’s trade diplomacy. The pact links India with Iceland, Liechtenstein, Norway and Switzerland, and is designed to support trade, investment, services, technology cooperation and industrial upgrading. It is seen as one of India’s most important agreements with high-income and innovation-driven economies.
Key Features of the Agreement
- EFTA has committed to cover 92.2% of tariff lines, accounting for 99.6% of India’s exports.
- India has covered 82.7% of tariff lines, accounting for 95.3% of EFTA exports.
- Sensitive sectors such as dairy, soya, coal and select agricultural products remain protected.
- The effective duty on gold remains unchanged.
Trade and Market Access Gains
The agreement strengthens India’s access to high-purchasing-power markets. It secures binding commitments across pharmaceuticals, textiles and garments, engineering goods, chemicals, processed foods and marine products. It also improves access to specialised machinery, precision components and high-standard industrial inputs. These can help Indian firms improve manufacturing quality, reduce cost disadvantages and integrate better with global supply chains.
Investment and Services Dimension
TEPA includes an investment pathway of USD 100 billion over 15 years and a target of one million direct jobs. It is expected to support manufacturing, research and development, renewable energy, life sciences, engineering and digital transformation. In services, the agreement provides a framework for cooperation in IT and IT-enabled services, professional services and knowledge-based sectors. It also allows Mutual Recognition Agreements in fields such as nursing, chartered accountancy and architecture.
Significance for India’s Trade Strategy
The pact supports India’s 2030 trade ambitions, including USD 1 trillion in merchandise exports and USD 1 trillion in services exports. It is expected to benefit farmers, fishers, MSMEs, start-ups, women entrepreneurs and youth-led enterprises. Regional export opportunities may expand for grapes, coffee, spices, seafood and horticulture. The agreement reflects India’s wider strategy of using trade to expand exports, strengthen domestic manufacturing and deepen participation in global value chains.
Last Modified: April 29, 2026