The India–European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) came into effect today, marking a significant milestone in India’s trade and investment landscape. The Ministry of Commerce and Industry confirmed that the agreement had been signed on 10th March last year in New Delhi.
EFTA, which comprises Iceland, Liechtenstein, Norway and Switzerland, presents substantial opportunities for India to expand international trade in goods and services. Switzerland is India’s largest trading partner within the bloc, followed by Norway.
According to the ministry, the agreement is modern and ambitious, incorporating—for the first time in any free trade agreement signed by India—a binding commitment linked to investment and job creation. Unlike foreign portfolio inflows, this commitment focuses on long-term capital, aimed at strengthening capacity building, technology transfer and innovation.
The TEPA unlocks significant prospects for Indian textiles and apparel, with Indian exporters expected to benefit from tariff concessions and expand their presence in EFTA’s premium textile market, which imports around US $ 14 billion worth of textiles annually.
The agreement provides market access for goods and services, trade facilitation, investment promotion, intellectual property rights, and sustainable development. EFTA’s market access covers 100% of non-agricultural products and tariff concessions on processed agricultural goods.
Crucially, the pact carries a binding commitment of US $ 100 billion investment in India over the next 15 years, which is projected to generate 1 million direct jobs. The ministry stated that this would empower Indian exporters by providing access to specialised inputs and creating a favourable trade and investment environment. This is expected to boost exports of Indian-made goods and open additional markets for services.
The agreement spans 14 chapters, addressing areas such as rules of origin, sanitary and phytosanitary measures, technical barriers to trade, and investment promotion. On goods, EFTA has offered duty concessions on 92.2% of tariff lines, covering almost all of India’s exports, including machinery, textiles, organic chemicals, processed food and marine products.
To support implementation, the Ministry of Commerce and Industry announced that a dedicated EFTA Desk has been operational since February this year. This single-window mechanism is designed to facilitate investment, assist EFTA businesses in establishing and expanding operations in India, and serve as the primary channel for sustained dialogue between governments and businesses on both sides.
The Confederation of Indian Textile Industry (CITI) has expressed optimism that the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) will play a significant role in expanding exports of Indian textile and apparel products to Europe.
CITI Chairman Ashwin Chandran noted that the TEPA could serve a much broader purpose than simply increasing exports of textile and apparel items to Iceland, Liechtenstein, Norway, and Switzerland, the four EFTA member states.
He further observed that the TEPA would complement the benefits expected to arise for Indian businesses from the free trade agreement (FTA) currently under negotiation with the European Union, which is likely to be concluded by the end of the year.
Chandran also highlighted that the TEPA aligned well with the goal of India’s textile and apparel exporters to reduce their reliance on the United States. He emphasised that the agreement would prove valuable as part of the sector’s diversification strategy.
