India-EFTA Trade Pact Takes Effect, Pledging $100 Billion Investment and 1 Million Jobs

The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) officially became effective on October 1, 2025. This comprehensive trade pact, signed on March 10, 2024, in New Delhi, marks a significant milestone in India's trade diplomacy, being the first Free Trade Agreement (FTA) signed by India that includes a binding commitment for investment and job creation.

Historic Investment and Job Creation Commitments

A central feature of the TEPA is the unprecedented commitment from the four EFTA member states—Iceland, Liechtenstein, Norway, and Switzerland—to invest $100 billion in India over the next 15 years. This investment is projected to generate 1 million direct jobs within India. The commitment specifies an initial $50 billion within the first 10 years, followed by an additional $50 billion in the subsequent five years. This long-term capital inflow specifically excludes foreign portfolio investments, focusing instead on building productive capacity, facilitating technology transfer, and fostering innovation.

Broad Scope and Market Access

The TEPA is a robust agreement, structured across 14 chapters, addressing a wide array of economic cooperation areas. These include market access for goods and services, investment promotion, intellectual property rights, government procurement, competition, and trade and sustainable development.

• Goods: EFTA has offered substantial concessions on 92.2% of its tariff lines, encompassing nearly 99.6% of India's exports, including non-agricultural products and processed agricultural goods. In return, India has provided concessions on 82.7% of tariff lines, covering 95.3% of EFTA exports. Notably, sensitive sectors for India, such as dairy, medical devices, processed food, and coal, have been protected from full tariff liberalization. Conversely, gold, a major EFTA export to India, will not see changes in its effective duty. Indian exports like basmati and non-basmati rice will gain duty-free access to EFTA markets.
• Services: India has made commitments across 105 sub-sectors, while EFTA nations have offered even broader access, with Switzerland covering 128 sub-sectors. The agreement also facilitates Mutual Recognition Arrangements (MRAs) in professional services, including nursing, chartered accountancy, and architecture, and aims to boost opportunities in sectors like information technology, business services, education, and audio-visual industries.

A Decade and a Half in the Making

The journey to the TEPA's implementation was extensive, with negotiations commencing in 2008 and spanning 21 rounds over 16 years before the agreement was signed in March 2024. The pact also incorporates a dedicated chapter on trade and sustainable development, featuring legally binding commitments on environmental protection and labor standards, a first for India in an FTA. To streamline investment and trade, a dedicated EFTA Desk has been operational since February 2025, serving as a single-window mechanism to support EFTA businesses in India.