India-European Free Trade Association and TEPA to come into effect from today
NEW DELHI : India-European Free Trade Association(EFTA) Trade and Economic Partnership Agreement (TEPA) will come into effect on 01 October 2025. The agreement was signed on 10th March 2024 at New Delhi.TEPA is a modern and ambitious agreement that incorporates, for the first time in any Free Trade Agreement (FTA) signed by India, a commitment linked to investment and job creation.
The agreement comprises of 14 chapters with main focus on market access related to goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access on services, intellectual property rights, trade and sustainable development and other legal and horizontal provisions.
The EFTA’s market access offer under TEPA covers 100% of non-agri products and tariff concession on Processed Agricultural Products (PAP). Sensitivity related to PLI in sectors such as pharma, medical devices & processed food etc. have been taken while extending offers.
The agreement goes beyond goods and services and committed to promote investments with the aim to increase the stock of foreign direct investments by USD 100 billion in India in the next 15 years, and to facilitate the generation of 1 million direct employment in India, through such investments.
Key features of the agreement
EFTA is an important regional group, with several growing opportunities for enhancing international trade in goods and services. EFTA is one important economic block out of the three (other two – EU &UK) in Europe. Among EFTA countries, Switzerland is the largest trading partner of India followed by Norway.
The TEPA will empower India’s exporters by providing access to specialized inputs and create conducive trade and investment environment. This would boost exports of Indian made goods as well as provide opportunities for services sector to access more markets.
Investment and Employment Commitments
As per Article 7.1 of TEPA , the EFTA States shall aim to increase foreign direct investment (FDI) from their investors into India by USD 50 billion within 10 years from the entry into force of the Agreement, and an additional USD 50 billion in the succeeding 5 years, amounting to a total of USD 100 billion over 15 years. Concurrently, the EFTA States shall aim to facilitate the generation of 1 million direct jobs in India resulting from these investment inflows.
This investment commitment explicitly excludes foreign portfolio investment (FPI), focusing on long-term capital for productive capacity building.
Market Access for Goods
Under TEPA, EFTA has offered 92.2% of tariff lines encompassing 99.6% of India’s exports. Includes 100% of non-agricultural products and tariff concessions on Processed Agricultural Products (PAP).
India’s offer to EFTA covers 82.7% of tariff lines, accounting for 95.3% of EFTA exports. Over 80% of these imports are Gold, with no change in effective duty on Gold. Sensitive sectors protected, including pharma, medical devices, processed food, dairy, soya, coal, and sensitive agricultural products.