When India’s Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) finally came into force on October 1, it didn’t open with media theatrics or summit declarations. But beneath the quiet roll out lies one of India’s most ambitious economic shifts, a move away from tariff haggling and towards long-term economic partnerships based on trust, capital and talent.
According to the Ministry of Commerce, this is India’s first-ever trade deal with a group of developed European economies, namely Switzerland, Norway, Iceland and Liechtenstein. It is not a traditional trade bargain, it is a strategic investment pact.
A $100 Billion Strategic Bet
At the heart of TEPA is an extraordinary commitment- $100 billion in investments over 15 years from EFTA nations into India. Switzerland, the largest EFTA economy, is expected to drive much of this inflow.
Half of that capital is pledged for the first decade, targeting sectors such as:
- Renewable energy
- Biotechnology & pharmaceuticals
- Precision manufacturing
- Digital and AI-led services
A dedicated India–EFTA Investment Desk, already set up by Invest India, is tasked with smoothing regulatory pathways, encouraging joint ventures and assisting MSMEs in accessing European partnerships.
“This is not short-term capital- it is trust capital,” a senior commerce official noted during the signing event in New Delhi.
Tariffs Down- But Caution Intact
Under the pact, EFTA has eliminated import duties on 92% of tariff lines for Indian exports, opening high-value European markets to Indian goods. India, in turn, has reduced tariffs on 82% of its lines, yet protected sensitive sectors like dairy, agriculture, medical devices and select pharmaceuticals.
This balance reflects a new economic realism: Grow globally, protect domestically.
Skills and Mobility: A First in Any Indian FTA
Unlike most trade agreements, TEPA goes far beyond goods. It breaks ground on professional mobility and services, making it possible for Indian nurses, architects, IT specialists and engineers to gain access under Mutual Recognition Agreements (MRAs).
This is the first time regulated professions have found place in an Indian FTA. Switzerland and Norway, both known for high labour standards, have opened cautiously but clearly. For India, this signals an evolution: exporting human capital, not just merchandise.
Farmers, Exporters and the Real Economy
Agriculture and manufacturing sectors are already sensing opportunity. According to DD News, Indian products such as basmati rice, organic coffee, spices, grapes and seafood are gaining smoother access into EFTA markets.
In FY 2024–25, engineering exports to EFTA nations jumped 18%, driven by lower duties and simplified standards, as confirmed by the Engineering Export Promotion Council (EEPC).
Industries positioned to gain include:
| Sector | Key Gains Under TEPA |
|---|---|
| Agriculture | Zero duty on spices, fruits, coffee, rice |
| Textiles & Leather | Easier entry, no quota ceilings |
| Engineering Goods | Tariff parity with EU suppliers |
| Plastics & Ceramics | Lower duties and custom stability |
IP Protection Without Compromise
Crucially, TEPA maintains India’s WTO-aligned safeguards on intellectual property, ensuring access to affordable generic medicines, a red line India refused to cross. There are no “TRIPS-plus” clauses, preventing patent ever greening and preserving public health flexibility.
What TEPA Reveals About India’s Global Playbook
TEPA is not a simple free trade pact, it represents a strategic recalibration. India is signalling that it is ready for deeper economic integration, but on its own terms, investment over aid, skills over dependency, leverage over concession.
This agreement quietly underscores New Delhi’s new posture:
- Negotiate as a civilizational economy, not a commodity exporter
- Anchor deals in talent, technology and trust
- Build alliances beyond geopolitics, through economic permanence
As India looks ahead to potential negotiations with the EU, the UK and the Gulf bloc, TEPA may be remembered not as the largest deal, but as the first of a new mindset, where India steps into the world not as a factory, but as a force.
