The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) will take effect on October 1, 2025, the Ministry of Commerce and Industry announced in a release on Tuesday. The agreement was signed on March 10, 2024, in New Delhi.

The agreement comprises 14 chapters, primarily covering 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, as well as various legal and horizontal provisions.

The EFTA’s market access offered under TEPA includes access to all non-agri products and tariff reductions on Processed Agricultural Products (PAP). Sensitivities regarding PLI in sectors such as pharmaceuticals, medical devices, and processed food have been taken into consideration when extending these offers.

The agreement extends beyond goods and services, committing to increase investments and raise the stock of foreign direct investment in India by $100 billion over the next 15 years. It also seeks to create one million direct jobs in India through such investments.

Key features of the agreement

EFTA is a vital regional organisation that offers numerous opportunities to boost international trade in goods and services. It is one of Europe’s three major economic blocs, alongside the EU and the UK. Within the EFTA, Switzerland is India’s leading trading partner, followed by Norway.

The TEPA aims to strengthen India’s exporters by giving them access to specialised inputs and fostering a favourable environment for trade and investment. This will enhance the export of Indian-made products and open up more market opportunities for the services sector.

Under Article 7.1 of TEPA, the EFTA states commit to increasing foreign direct investment (FDI) in India by $50 billion within the first ten years following the agreement coming into effect. They also aim to add another $50 billion over the next five years, bringing the total to $100 billion over 15 years. Additionally, the EFTA States will work to create a million direct jobs in India as a result of these investments.

This investment commitment explicitly excludes foreign portfolio investment (FPI), focusing on long-term capital for building productive capacity.

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

India’s proposal to the EFTA encompasses 82.7% of tariff lines, accounting for 95.3% of EFTA's exports. More than 80% of these imports consist of gold, with no alteration in the effective duty on gold. Sectors deemed sensitive, including pharmaceuticals, medical devices, processed foods, dairy, soy, coal, and various other agricultural commodities, continue to be safeguarded.

Sector-wise benefits under TEPA

Agriculture and allied goods: The FTA tariff concessions make the following high-opportunity sectors for India:

• Processed Food Products, including biscuits, confectionery, chocolate, malt extracts, sauces, and miscellaneous food preparations.

Coffee

EFTA has offered nil import duty on all the HS lines pertaining to coffee. Switzerland and Norway are high-value markets with strong demand for high-quality coffee. TEPA will provide the most favourable market access to Indian Coffees in the EFTA market.

TEPA may facilitate coffee exporters’ access to premium markets in Switzerland, Norway, and Iceland, thereby offering an opportunity to position India’s high-quality, shade-grown, handpicked, and sun-dried coffees in the EFTA market.

Tea

The EFTA has a combined tea market size of approximately three million kilograms. In the post-TEPA period, the average unit export price has increased significantly ($6.77/kg in 2024-25 compared to $5.93/kg in 2023-24).

Marine Products

Norway has exempted duty of up to 13.16% on fish/shrimp feed. This will make Indian products competitive and enhance the export of fish feed and raw materials for fish/shrimp feed from India to Norway. Iceland, on the other hand, has eliminated tariffs of up to 10% on frozen, preserved shrimp and prawns, squid, and cuttlefish, as well as up to 55% on fish feed. Switzerland has implemented zero duty on Fats and oils of fish (other than liver oil)

TEPA will provide an opportunity to increase the export of marine products, in addition to frozen shrimps from India to EFTA countries. This is expected to increase the exports to $3.50 million in the coming years.

Textiles and Clothing

India’s textiles and apparel clothing exports to the EFTA were $130 million in 2024. Given India’s total global textiles exports were $36.71 billion in 2024, TEPA offers an opportunity to capture the untapped market by leveraging tariff concessions.

Leather and Footwear 

The MFN is 0% in EFTA countries for leather and footwear, which is an advantage that would continue even after the implementation of TEPA. TEPA consolidates and guarantees this preferential treatment, providing exporters with long-term certainty and stability.

Sporting Goods and Toys

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 to lower compliance costs for exporters.

Engineering Goods

TEPA will provide enhanced market access and tariff concessions to boost competitiveness and open new opportunities for Indian engineering exporters across high-value sectors.

There is considerable market potential in electric machinery, aluminum products, AC/refrigeration equipment, bicycles, and copper items. This underscores opportunities for growth in areas like sustainable and precision engineering, energy-efficient solutions, and infrastructure-related goods.

Gems and Jewellery 

Exports from gems and jewellery enjoy duty-free access in EFTA markets, a preferential treatment that would continue under TEPA. There is market potential for gold, silver, and imitation jewellery in Iceland; cut and polished diamonds, gold, silver, and imitation jewellery in Norway; and cut and polished natural diamonds, gold jewellery, and polished rubies, sapphires, and emeralds.

Electronics and Software

The TEPA offers a springboard for India’s electronics sector, especially for MSMEs and OEMs seeking global scale.

There is an export potential for Medical electronics (diagnostic devices, wearables), Smart sensors and embedded systems, Secure communication modules (for fintech and banking) in Switzerland, leveraging TEPA’s IPR chapter to protect proprietary technology.

In Norway, there is potential for EV components and battery management systems, Marine electronics (navigation, sonar, IoT buoys), Smart grid and energy monitoring devices, aligning with Norway’s climate tech goals and public procurement channels.

For Iceland, compact medical devices and diagnostics, Smart home and energy-efficient electronics, educational tech hardware (tablets, sensors), targeting niche distributors and public health initiatives

In Lichtenstein, there is potential for industrial control systems, secure embedded electronics for banking, and high-precision components for OEMs, positioning India as a reliable EMS partner for European OEMs.

Chemicals and Allied Products

 EFTA has offered zero or reduced tariffs on more than 95% of India’s exports, including a wide range of chemical products. India, in turn, has granted market access to nearly 80% of its tariff lines covering 95% of EFTA’s exports.TEPA also incorporates product-specific rules of origin, certificates of origin, and movement certificates (EUR.1), ensuring greater transparency and simplifying compliance for exporters, especially in the chemical and pharmaceutical sectors.

Before the FTA, certain chemical sector products faced tariffs of up to 54%; however, post-FTA, these tariffs will be eliminated, thereby increasing the reach of Indian chemical products in the EFTA bloc.

Exports of CAPEXIL products to EFTA are expected to expand gradually from $49.41 million to around $65–70 million in the post-FTA period, with notable gains anticipated in pet food, rubber products, paper, stone/ceramic items, and glassware.

Plastics and shellac-based products

TEPA offers Indian plastic exporters significant opportunities to diversify away from high-tariff markets such as the U.S. and strengthen their presence in high-value EFTA markets. With zero tariffs and improved trade facilitation, India’s exports across diverse panels are expected to achieve steady growth, supported by vast untapped potential in Switzerland and Norway.

TEPA can significantly strengthen India’s position in high-value botanical and forest product markets, while also attracting investments and supporting small exporters.

Gains in the services sector

The services sector, which contributes nearly 55% to India’s Gross Value Added (GVA), is set to benefit significantly from TEPA. India has offered commitments in 105 sub-sectors to the EFTA while securing enhanced access in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland.

TEPA is expected to increase India’s services exports in key areas, including IT and business services, cultural and recreational services, education, and audio-visual services.

EFTA’s Services provide enhanced access via digital delivery (Mode 1), commercial presence (Mode 3), and reinforced commitments along with increased certainty regarding the entry and temporary stay of key personnel (Mode 4).

Furthermore, TEPA encompasses provisions for Mutual Recognition Agreements (MRAs) in professional fields, including nursing, chartered accountancy, and architecture, thereby establishing new opportunities for Indian professionals within EFTA markets.