In an era when global trade alliances are being redrawn amid shifting supply chains and geopolitical recalibrations, India’s signing of the India–European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) stands out as a strategic leap. It is not merely another trade pact but a statement of intent, signalling India’s confidence in engaging with advanced economies on equal footing. By partnering with Switzerland, Norway, Iceland, and Liechtenstein, India has not only expanded its economic geography but also redefined the contours of its trade diplomacy with a $100 billion investment commitment and the promise of one million new jobs.
On the goods front, it offers extensive tariff liberalisation, EFTA has committed to cover 92.2 per cent of its tariff lines, accounting for 99.6 per cent of India’s exports, while India has extended concessions over 82.7 per cent of tariff lines, covering 95.3 per cent of EFTA’s exports. This balance ensures openness while protecting sensitive sectors such as dairy, coal, and select agricultural products.
Encompassing 14 chapters on goods, services, investment, intellectual property, and sustainable development, TEPA reflects India’s shift towards a mature, strategic trade policy that blends openness with domestic resilience. Moreover, the inclusion of mutual recognition of professional qualifications enhances India’s services trade potential, positioning the country as a stronger and more competitive player in Europe’s evolving trade landscape.
Deepening gains
TEPA’s benefits are multidimensional, spanning agriculture, industry, and high-technology sectors. For agriculture, India’s exports to EFTA, valued at $72.37 million in FY 2024-25 comprise guar gum, processed vegetables, basmati rice, pulses, fruits, and grapes. Tariff eliminations and reductions, especially in Switzerland and Norway, which together account for over 99 per cent of India’s agri-trade with EFTA, are poised to enhance competitiveness. Swiss tariffs on food preparations, confectionery, and fresh grapes, previously as high as 272 CHF per 100 kg, are being abolished, while Norway’s duty-free access for rice, beverages, and processed foods opens new premium markets. Similarly, Iceland’s removal of tariffs (up to 97 ISK/kg) on processed foods and chocolates strengthens India’s processed food exports.
The coffee and tea sectors also emerge as major gainers. With EFTA countries collectively importing $175 million worth of coffee, nearly 3 per cent of global trade, India’s zero-duty access positions its shade-grown, hand-picked coffee for premium European markets. For tea, the average export realisation has already risen to $6.77 per kg in 2024-25, from $5.93 the previous year, reflecting quality-based differentiation and better margins.
Marine products, another crucial segment, benefit from duty exemptions up to 13.16 per cent in Norway on fish and shrimp feed, tariff eliminations up to 10 per cent in Iceland on frozen and preserved seafood, and zero duty in Switzerland on fish oils. These measures enhance the cost competitiveness of India’s seafood exports while integrating them into sustainable aquaculture supply chains.
On the industrial front, the engineering sector, where exports to EFTA reached $315 million in FY 2024-25, growing 18 per cent year-on-year, stands to gain substantially. The pact opens markets for electric machinery, copper products, energy-efficient systems, and precision engineering goods. Textiles, apparel, leather, and footwear sectors benefit from duty stability and simplified standards, while sports goods and toys enjoy zero-duty access alongside mutual recognition of conformity standards.
The gems and jewellery sector, long a key player in India’s export portfolio, will see consolidated duty-free access, particularly benefiting exporters of diamonds, gold, and coloured gemstones. In chemicals, plastics, and allied products, EFTA has extended zero or reduced tariffs on 95 per cent of India’s exports, with potential growth from $49 million to $70 million. This includes opportunities in pet food, ceramics, and glassware, enabling Indian firms to diversify into high-value European markets.
A partnership beyond trade
The India-EFTA Trade and Economic Partnership Agreement (TEPA) is a partnership with purpose, built on investment-led and sustainable growth rather than just tariff concessions. With a $100 billion investment commitment and one million direct jobs over 15 years, it bridges India’s skilled human capital with Europe’s advanced technology, promoting long-term industrial capacity. The agreement benefits key sectors such as IT, business services, and education through provisions on digital delivery, professional mobility, and intellectual property cooperation, while safeguarding India’s autonomy in areas like generics and public health. Equally, TEPA integrates sustainability into trade by embedding environmental safeguards, social inclusivity, and simplified trade rules, aligning with India’s broader development and climate goals. It reduces compliance costs for exporters and promotes responsible, transparent globalisation.
In conclusion, TEPA reflects India’s economic maturity, balancing openness with protection, ambition with caution. It consolidates India’s image as a trusted, innovation-driven trade partner and gives EFTA nations access to a stable, growing market. More than a trade deal, TEPA is a blueprint for strategic trust and shared prosperity, marking a new phase in India’s global economic engagement that is balanced, inclusive, and future-ready.
The writer is an Assistant Professor at Symbiosis Institute of International Business (SIIB), Pune. Views are personal
Published on October 21, 2025
