Switzerland has completed ratification process of the India–EFTA Trade and Economic Partnership Agreement (TEPA), paving the way for the landmark trade pact to come into effect by October 2025. This is expected to boost bilateral trade, long-term investments, and job creation in India.
Key Highlights of TEPA
- Effective from: October 2025 (with phased tariff dismantling for some products over 10 years).
- Parties involved: India & EFTA States – Iceland, Liechtenstein, Norway, Switzerland.
- Negotiation period: Nearly 16 years before signing in March 2025.
- Investment commitment: EFTA to invest USD 100 billion (₹8.3 lakh crore) in India over 15 years.
- Job creation: 1 million (10 lakh) jobs in India through these investments.
- Tariff Reductions: Progressive dismantling of tariffs over 10 years.
- Customs Procedures: Streamlined for ease of trade.
- Sectoral Opportunities: Swiss focus on precision instruments, engineering, pharma, services; Indian focus on IT, machinery, pharma.
- Focus areas:
- Reduction of tariffs
- Streamlined customs procedures
- Enhanced Intellectual Property Rights (IPR) protection
- Sustainable trade practice.
Switzerland’s Role and Investments in India
- 12th largest investor in India.
- Swiss FDI Growth: From CHF 551 million (2000) → CHF 10 billion (2024).
- Swiss Companies in India: 330+ companies active in engineering, services, chemicals, pharma.
- Indian Companies in Switzerland: Presence in IT, pharma, machinery.
- Innovation: Launch of Swiss-Indian Innovation Platform in Bengaluru (Oct 2023) connecting IITs, Swiss universities, and industries.
India–Switzerland Bilateral Relations
- Diplomatic Ties: Began with Treaty of Friendship, 1948.
- Multi-sectoral Cooperation Areas:
- Trade & Investment
- Education, Research & Innovation
- Skills & Vocational Training
- Climate Change & Disaster Risk Reduction
- Culture & Development Partnerships
- Regular High-Level Visits reinforce the partnership.
EFTA (European Free Trade Association)
- Founded: 1960 (Stockholm Convention).
- HQ: Geneva, Switzerland.
- Members: Iceland, Liechtenstein, Norway, Switzerland.
- Difference from EU: EFTA is not part of the European Union (EU) but maintains free trade and economic integration agreements with EU and global partners.
Switzerland
- Capital: Bern
- Currency: Swiss Franc (CHF)
- President (2025): Viola Amherd
- Known for: Banking sector, precision instruments, pharma (Novartis, Roche), watch industry, and neutrality in global politics.
India–EFTA Trade
- India–EFTA Bilateral Trade (2023): ~USD 25 billion.
- Key Indian Exports to EFTA: Textiles, garments, organic chemicals, machinery, precious stones, pharma.
- Key Imports from EFTA: Machinery, pharma products, watches, precision instruments.
India’s other major FTAs/CEPAs:
- India–UAE CEPA (2022)
- India–Australia ECTA (2022)
- Negotiations ongoing with UK, EU, GCC, Canada.
Need of Such Agreements
- First major trade pact with a European bloc in over a decade.
- Emphasizes India’s growing attractiveness for FDI & job creation.
- Strengthens India’s position in global trade negotiations.
- Strengthen India’s role in global supply chains.
- Help in export-led growth & job creation.
- Reduce dependence on a few partners (US, EU, China).
- Support government initiatives: Make in India, Skill India, Digital India, Atmanirbhar Bharat.
India–UAE Comprehensive Economic Partnership Agreement (CEPA)
- Signed: February 2022 | Effective: May 2022
- Coverage: Goods, services, investment, digital trade, government procurement.
- Tariff impact: UAE eliminated 80% tariffs on Indian exports (to reach 100% in 10 years).
- Export boost: Gems & jewellery, textiles, pharma, engineering goods, agriculture.
- Bilateral trade (2023–24): USD 85 billion (target USD 100 billion by 2030).
- Special note: First major FTA under PM Modi’s “FTA fast-track strategy”; aligns with India’s Gulf engagement.
- UAE- 3rd largest trading partner of India; major source of remittances.
India–Australia Economic Cooperation and Trade Agreement (ECTA)
- Signed: April 2022 | Effective: December 2022
- Coverage: Goods, services, investment, labour mobility.
- Tariff impact:
- Australia gave duty-free access to 96% Indian exports (includes textiles, gems, leather, pharma).
- India reduced duties on Australian wine, coal, raw materials.
- Trade target: Bilateral trade expected to reach USD 100 billion by 2030.
- Skill mobility: Easier visas for Indian students, professionals, and chefs in Australia.
- Australia- part of Quad (India, US, Japan, Australia); key partner in Indo-Pacific strategy.