India–EFTA Trade and Economic Partnership Agreement (TEPA) officially came into force during the Prosperity Summit held in New Delhi, marking a major milestone in India’s trade engagement with Europe.
The agreement includes an investment commitment of USD 100 billion over 15 years and aims to create one million direct jobs in India, while deepening market access across Switzerland, Norway, Iceland, and Liechtenstein.
It symbolizes a trusted, balanced partnership built on mutual respect and shared prosperity — aligning with India’s long-term goal of Viksit Bharat 2047.
Background
- Signing Date: 10th March, 2024
- Parties: Government of India and the European Free Trade Association (EFTA)
- EFTA Members: Iceland, Liechtenstein, Norway, and Switzerland
- Investment Commitment:
- USD 100 billion over 15 years
- USD 50 billion in the first 10 years, followed by USD 50 billion in the next 5 years
- Job Creation Target: 1 million direct jobs in India
This is India’s first trade agreement that includes a firm, quantified investment commitment, making it a unique model for equitable partnerships.
Key Highlights of TEPA
Strategic Importance
- Marks India’s most comprehensive economic pact with a European bloc.
- Represents a “beacon of stability and certainty” amid global trade disruptions.
- Integrates investment, trade, and services in a single framework — fostering long-term growth, innovation, and mutual benefit.
Priority Sectors of Cooperation
TEPA unlocks opportunities across multiple sectors:
- Life Sciences & Pharmaceuticals
- Clean Energy & Green Technologies
- Precision Engineering & Food Processing
- Artificial Intelligence, Technology, and Digital Services
- Accountancy, Nursing, and Education Services
- Audio-visual, Culture, Tourism, and Recreation
- Geothermal Energy (with Iceland)
- Shipbuilding, Maritime Services, Container Manufacturing (with Norway)
- Advanced Manufacturing, R&D, and Innovation (with Switzerland & Liechtenstein)
Economic Synergy: “Power of Five (Panch)”
The TEPA framework identifies the complementary strengths of all five partners:
Partner | Key Contribution |
India | Scale, market size, skilled talent, competitive cost structure |
Switzerland | Precision manufacturing, finance, and capital goods |
Norway | Maritime expertise and clean energy capabilities |
Iceland | Niche cleantech and digital innovation |
Liechtenstein | Specialized engineering and high-value manufacturing |
This “Power of Five” synergy aims to amplify trade, investment, and technology flows for the next 2–3 decades.
Implementation and Roadmap
Sectoral Roadmaps:
- Focused strategies for engineering, pharma & med-tech, textiles, marine, and food processing sectors.
MSME Empowerment:
- Standards cooperation and lab-onboarding to reduce compliance costs.
- Buyer–supplier matchmaking and skill training in quality and packaging.
Export Facilitation:
- Enhanced logistics to reduce port dwell times and transit durations.
- Tariff advantages for Indian farmers, agri-marine, and specialty food exporters in EFTA markets.
Services Access:
- Easier pathways under Mode 1 (Digital delivery), Mode 3 (Commercial presence), and Mode 4 (Professional mobility).
- Mutual Recognition Agreements (MRAs) to ensure smoother professional exchanges.
Business Announcements and Investments
- The Prosperity Summit witnessed multiple investment announcements by EFTA-based firms.
- Swiss multinationals like ABB and Nestlé were highlighted as long-standing examples of India’s potential as a global manufacturing hub and innovation centre.
- India now hosts nearly 2,500 Global Capability Centres (GCCs) that support Fortune 500 companies worldwide, reinforcing its role as a knowledge and digital powerhouse.
Broader Significance
- Boosts India–Europe Economic Engagement: Enhances India’s footprint in Europe’s non-EU markets.
- Job Creation Engine: Focus on skilled employment in sunrise sectors.
- Confidence in Indian Economy: Reflects global trust in India’s macroeconomic resilience and growth trajectory.
- Trade Balance: Expected to improve market access for Indian goods and services in premium European markets.
- Sustainability: Promotes green technology transfer, clean energy cooperation, and responsible growth models.
About EFTA (European Free Trade Association)
Attribute | Details |
Established | 1960 (via the Stockholm Convention) |
Members | Switzerland, Norway, Iceland, Liechtenstein |
Headquarters | Geneva, Switzerland |
Purpose | To promote free trade and economic integration among member states and with non-EU partners |
Nature | EFTA is not part of the European Union (EU) but maintains close economic ties with it through separate agreements. |
India–EFTA Relations | India began negotiations with EFTA in 2008, and TEPA is the first FTA between India and any European bloc. |
Key Facts
India’s Other Major FTAs in Recent Years:
- India–UAE CEPA (2022)
- India–Australia ECTA (2022)
- India–Mauritius CECPA (2021)
- India–ASEAN FTA (2010)
- India–Japan CEPA (2011)
Viksit Bharat 2047 Vision:
- A national development roadmap for India to become a developed nation by 2047, emphasizing inclusive growth, innovation, and sustainability.
India’s Trade Facts (FY 2024–25):
- Merchandise exports: ~USD 437 billion
- Services exports: ~USD 340 billion
- Total trade (exports + imports): Over USD 1.6 trillion
Major Sectors Benefiting under TEPA:
- Pharmaceuticals & Biotech – boosted by Swiss expertise.
- Marine Exports & Shipbuilding – benefiting from Norway’s maritime competence.
- Geothermal & Renewable Energy – collaboration with Iceland.
- Precision Tools & Engineering Goods – collaboration with Liechtenstein and Switzerland.
India’s Competitive Edge:
- Lowest global data cost (~3% of US levels).
- Strong digital infrastructure through India Stack and Unified Payments Interface (UPI).
- World’s fastest-growing large economy and projected 3rd largest by 2030 (IMF estimate).