New Delhi. On October 1, 2025, India will take a decisive step in reshaping its global trade footprint by formally operationalising the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) bloc.
This agreement, signed earlier in March 2024, will finally come into effect after a series of procedural approvals in the four EFTA member nations—Switzerland, Norway, Iceland, and Liechtenstein.
The grand launch ceremony will take place at Bharat Mandapam in New Delhi, where Commerce and Industry Minister Piyush Goyal will preside over the event alongside senior ministers from the EFTA bloc, top Indian government officials, and industry leaders.
The event is designed not just as a ceremonial announcement but also as an important outreach initiative—ensuring that Indian industry stakeholders are well-informed and fully prepared to take advantage of the pact’s sweeping provisions.
A Historic First for India in Europe
This agreement is historic for multiple reasons. It marks India’s first-ever trade pact with a European grouping, breaking years of deadlock in negotiations with the European Union and other Western economies.
The deal showcases New Delhi’s maturing trade diplomacy, where the focus has shifted from narrow tariff-centric talks to a broader framework that links market access with guaranteed foreign investment.
As Minister Goyal emphasized during the valedictory session of the Uttar Pradesh International Trade Show, this agreement is unlike any India has signed before.
“From the first of next month, a group of four countries—Switzerland, Liechtenstein, Norway, and Iceland—will also come into effect,” he declared, underlining the magnitude of this milestone in India’s global trade engagement.
Key Provisions: Market Access in Exchange for Investment
The Trade and Economic Partnership Agreement (TEPA) is unique in its architecture. India has agreed to reduce tariffs to zero on nearly 80–85 percent of goods imported from EFTA countries. In exchange, Indian exporters will now gain duty-free access to 99 percent of goods sold in EFTA markets.
Sensitive domestic sectors such as agriculture and dairy have been kept outside the purview of tariff concessions to shield India’s farmers from an onslaught of heavily subsidized European products.
This careful balance ensures that the agreement protects vulnerable groups while opening up vast new opportunities for India’s export-driven industries.
The most groundbreaking aspect, however, is the scale of investment commitments secured from the EFTA bloc.
The four member nations have pledged to pump $50 billion into India within the first 10 years of the agreement, followed by an additional $50 billion over the subsequent five years.
Government estimates suggest that this infusion of capital will help generate at least one million direct jobs over the next 15 years—a transformation that could uplift entire sectors of the Indian economy.
Trade Dynamics: Where the Balance Lies
While India’s trade relationship with the EFTA bloc is currently skewed, this agreement is designed to slowly correct the imbalance. At present, Switzerland overwhelmingly dominates India’s trade with the bloc.
- In FY25, India exported goods worth $1.97 billion to EFTA, with nearly three-fourths of that directed to Switzerland.
- Imports from the bloc, however, dwarfed exports at $22.44 billion. Of this, Switzerland alone accounted for $21.8 billion—97 percent of the total.
- The resulting trade deficit stood at a staggering $20.47 billion.
Given that EFTA nations already maintain low import tariffs, India’s immediate gains in market access may appear modest compared to other free trade agreements.
But the long-term investment-linked design of TEPA ensures that India will secure not just export opportunities but also the capital inflows necessary for industrial growth, job creation, and technological advancement.
Strategic Significance and Global Messaging
The signing and now the operationalisation of TEPA marks a strategic breakthrough for India in Europe, something that has eluded successive governments for decades.
Unlike the stalled negotiations with the European Union—where disagreements on tariffs and non-tariff barriers often led to dead ends—this agreement demonstrates India’s flexibility and foresight in striking a deal that benefits both sides.
It also sends a strong message to the world: India is no longer content being a passive player in global trade. Instead, it is proactively shaping trade agreements that strengthen domestic industries, attract long-term investments, and create jobs for its youthful workforce.
The timing is equally significant. By clinching this deal with EFTA, India has effectively outpaced protectionist voices in the West, including Donald Trump’s rhetoric of “America First.”
The operationalisation of TEPA is not just an economic win—it is also a diplomatic setback to Trump’s inflated ego and to those who seek to sideline India in global trade frameworks.
New Delhi has proved that it can independently carve out strategic partnerships with advanced economies, bypassing the roadblocks of populist politics in Washington or Brussels.
A New Era in Trade Diplomacy
TEPA is more than just another trade pact—it represents the beginning of a new era in India’s economic diplomacy. By linking tariff cuts to ironclad investment commitments, India has set a precedent that could shape its future negotiations with other advanced economies.
As the agreement takes effect from October 1, Indian exporters, manufacturers, and service providers will step into a new playing field with unprecedented opportunities. The ripple effects of this deal could redefine India’s role in the global economy, opening up pathways not only in Europe but also in other advanced markets.
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