The recent signing of the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) marks milestone. This pact with Switzerland, Norway, Iceland, and Liechtenstein is India’s first comprehensive trade deal with developed European economies. It promises substantial investment, job creation, and strategic cooperation, reflecting India’s evolving global economic stature.
Overview of TEPA
TEPA is more than a trade agreement. It represents India’s emergence as a confident global player. The pact commits to $100 billion investment over 15 years and aims to create up to one million direct jobs in India. It signals India’s ability to negotiate on equal footing with advanced economies while prioritising national interests.
Market Access and Tariff Concessions
EFTA countries agreed to eliminate or reduce tariffs on 92.2% of tariff lines, covering 99.6% of India’s export value. Duty-free treatment applies to all non-agricultural products. Key sectors benefiting include organic chemicals, textiles, gems and jewellery, and industrial goods. This enhances competitiveness and offers consumers more choices at better prices.
Service Sector and Skilled Workforce Benefits
India secured commitments in over 100 sub-sectors across EFTA nations. These include IT professionals, business service providers, and other skilled workers. This reinforces India’s position as a global hub for services and supports employment growth in knowledge-driven industries.
Strategic and Technological Collaboration
TEPA encourages partnerships in precision engineering, pharmaceuticals, health sciences, renewable energy, and frontier technologies. These align with India’s development needs. The agreement facilitates technology transfer and innovation, enabling India to adapt and scale new technologies for domestic and global markets.
Support for India’s Clean Energy Goals
India aims to install 500 GW of renewable energy by 2030 and achieve Net Zero by 2070. TEPA opens access to European green finance and technology, crucial for this transition. India’s current non-fossil fuel capacity stands at 243 GW, half of its total electricity capacity, ahead of global climate targets.
Nuclear Energy and Thorium Potential
India holds nearly 25% of the world’s thorium reserves, a clean and safe nuclear fuel. TEPA could accelerate thorium research through European collaboration, especially with Norway’s expertise. This supports India’s three-stage nuclear programme and offers prospects for stable baseload power and future technology exports.
Economic and Diplomatic Significance
TEPA strengthens India’s economic diplomacy by combining trade liberalisation, investment, and technology partnerships. It enhances supply chain resilience and aligns with climate commitments. The pact sets a benchmark for future global partnerships focused on sustainable and inclusive growth.
Questions for UPSC:
- Point out the significance of comprehensive trade agreements like the India-EFTA TEPA in enhancing a country’s global economic integration and domestic growth.
- Underline the role of technology transfer and strategic collaborations in achieving national climate goals, with suitable examples from international partnerships.
- Critically analyse India’s nuclear energy potential with reference to thorium reserves and the challenges of scaling up thorium-based power generation.
- Estimate the impact of trade agreements on employment generation and service sector growth, citing the example of India’s commitments under TEPA.
