India-EFTA TEPA: A $100 Billion Bet For Investment & Innovation

TEPA is a comprehensive free trade deal that eliminates tariffs on the majority of goods and includes a historic commitment to mobilise $100 billion in investments in India. With a $100 billion investment commitment and preferential access to high-income European markets, TEPA offers a strategic springboard for India’s electronics sector, especially for micro, small, and medium enterprises (MSMEs) and original equipment manufacturers (OEMs) seeking to scale globally. 

Among the EFTA countries, Switzerland is the largest trading partner of India, followed by Norway.

Benefits Of EFTA Partnership

The main focus of the agreement is on market access for goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access for services, intellectual property rights, trade and sustainable development, and other legal and horizontal provisions.

The EFTA’s market access offer under TEPA covers 100% of non-agri products and a tariff concession on Processed Agricultural Products (PAP). Sensitivity related to product-linked incentives (PLI) in sectors such as pharma and medical devices, and processed food, among others, has been considered while extending the offers. 

The agreement goes beyond goods and services, as it commits to promoting investments to increase the stock of foreign direct investments (FDIs) by US$100 billion in India in the next 15 years, besides aiming to generate 1 million direct employment creation. 

The TEPA will also empower India’s exporters by providing access to specialised inputs and creating a conducive trade and investment environment. This would boost exports of Indian-made goods as well as provide opportunities for the services sector to access more markets.

Market Access For Goods

Under TEPA, the EFTA has offered 92.2% of tariff lines encompassing 99.6% of India’s exports. It Includes 100% of non-agricultural products and tariff concessions on Processed Agricultural Products (PAP).

India’s offer to EFTA covers 82.7% of tariff lines, accounting for 95.3% of EFTA exports. Over 80% of these imports are Gold, with no change in effective duty on Gold. Sensitive sectors that are protected include pharma, medical devices, processed food, dairy, soya, coal, and sensitive agricultural products.

TEPA presents stronger opportunities in IT, business services, cultural and recreational services, education, and audio-visual services. 

Further, it provides improved access through the digital delivery of services, commercial presence, and more certainty for the entry and temporary stay of key personnel.

Moreover, it ensures IPR commitments at the Trade-Related Aspects of Intellectual Property Rights (TRIPS) level. The IPR chapter with Switzerland has a high standard for IPR, showing a robust IPR regime. India’s interests in generic medicines and concerns related to the evergreening of patents have been fully addressed. 

Sustainable, Inclusive Development

TEPA emphasises sustainable development, inclusive growth, social progress, and environmental protection. It will foster transparency, efficiency, simplification, harmonisation, and consistency in trade procedures.

TEPA would accelerate the creation of a large number of direct jobs for India’s young aspirational workforce in the next 15 years, including better facilities for vocational and technical training. TEPA also facilitates technology collaboration and access to world-leading technologies in precision engineering, health sciences, renewable energy, innovation, and research and development.

Sector-Wise Gains

Norway and Switzerland together account for over 99% of India’s agri-exports to EFTA. India’s exports to EFTA stood at US$72.37 million in 2024, contributing 0.41% of EFTA’s total imports. This agreement is expected to reduce tariff barriers and expand India’s share in key commodities.

Based on trade patterns and FTA tariff concessions, India can scale exports significantly as it opens opportunities in sectors including processed food products. Tariff elimination enhances competitiveness against Italy, Thailand, and Pakistan. Tariff concessions would also improve market entry and positioning.

India’s textiles and apparel exports to the EFTA stood at US$0.13 billion in 2024. Given India’s total global textiles exports stood at US$36.71 billion in 2024, TEPA offers an opportunity to capture the untapped market by leveraging tariff concessions. 

TEPA would bring zero-duty access for a large share of tariff lines, enhancing competitiveness for Indian exporters. Streamlined conformity assessment, mutual recognition of standards (MRAs), and simplified CE marking compliance under TEPA would lower compliance costs for exporters.

TEPA will provide enhanced market access and tariff concessions to boost competitiveness and open new opportunities for Indian engineering exporters across high-value sectors. Gems and jewellery exports would also enjoy duty-free access in EFTA markets: a preferential treatment that will continue under TEPA.

Even as the free trade agreements (FTAs) and the comprehensive economic partnership agreements (CEPAs) with the UK and the EU are yet to bear fruit, the EFTA, through TEPA, would significantly bolster India's FDI inflow, job creation, and export competitiveness. The four EFTA countries have huge investment capacity and innovation capabilities that India can leverage to the most. 

(The writer is a commentator on geopolitics and geoeconomics. Views expressed are personal.)