KATHMANDU: The India–European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) will come into force on October 1, 2025, marking India’s first free trade agreement with four developed European nations — Switzerland, Norway, Iceland, and Liechtenstein.Signed in March 2024, TEPA is being hailed as a modern and ambitious pact.
For the first time in any FTA signed by India, it carries a binding commitment on long-term investment and job creation. Under Article 7.1, EFTA states have pledged to increase foreign direct investment in India by $100 billion over the next 15 years and to help generate 1 million direct jobs.
The agreement spans 14 chapters, covering goods, services, investment, rules of origin, trade facilitation, sanitary and phytosanitary measures, intellectual property rights, and trade and sustainable development. Sensitive sectors such as dairy, soya, coal, and certain agricultural products have been protected.
On goods, EFTA has offered duty concessions covering 92.2% of tariff lines, representing 99.6% of India’s exports, including 100% of non-agricultural products and processed agricultural goods. India’s offer, meanwhile, covers 82.7% of tariff lines representing 95.3% of EFTA exports. Notably, imports of gold, which make up over 80% of EFTA’s exports to India, will see no change in effective duty.
On services, TEPA is expected to boost exports in India’s core strengths such as IT, business services, education, and audio-visual industries. The deal also enables Mutual Recognition Agreements (MRAs) in professional services such as nursing, chartered accountancy, and architecture. Improved access has been secured through commitments on digital delivery (Mode 1), commercial presence (Mode 3), and greater certainty for entry and temporary stay of professionals (Mode 4).
TEPA also lays emphasis on sustainable and inclusive development, technology collaboration, and vocational training. It is expected to accelerate investment flows into renewable energy, health sciences, precision engineering, and digital transformation, while enhancing opportunities for Indian exporters in sectors ranging from processed food, rice, guar gum, and marine products to textiles, engineering goods, electronics, gems and jewellery.
A dedicated India–EFTA Desk has been set up as a single-window mechanism to facilitate EFTA investments, streamline regulatory processes, and promote joint ventures, SME partnerships, and R&D collaborations.
Officials said the agreement strengthens the “Make in India” initiative by ensuring investment-led growth, while providing Indian exporters preferential access to high-value European markets.
Comment