INDIA EFTA TEPA: TWO YEARS OF GROWING PARTNERSHIP
Why is this news important?
- India has completed 2 years of signing the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA).
- The agreement started full implementation on 1 October 2025.
- Now India and these European countries are working together in trade, investment, services, and technology cooperation.
- This partnership is important for India’s plan to increase exports, attract investment, and strengthen
WHAT IS EFTA?
- EFTA (European Free Trade Association) is a group of four European countries:
- Norway
- Switzerland
- Iceland
- Liechtenstein
- These countries are not part of the European Union (EU) but they are rich, developed and technologically advanced economies.
- Because people in these countries have high purchasing power, their markets are very valuable for exporters.
WHAT IS INDIA EFTA TEPA?
TEPA (Trade and Economic Partnership Agreement) is a Free Trade Agreement (FTA) between India and EFTA countries.
Main purpose:
- Increase trade
- Promote investment
- Improve technology cooperation
- Strengthen industrial growth
The agreement connects India’s growing economy with high-income European markets.
INDIA’S GROWING FTA NETWORK
According to the Prime Minister, India has now signed Free Trade Agreements with 38 countries.
These agreements help India to:
- Sell products in many global markets
- Reduce tariffs (import duties) on exports
- Increase global trade partnerships
Example:
- Trade with Australia and UAE has increased after FTAs.
This shows that FTAs are becoming an important tool of India’s trade policy.
KEY FEATURES
(1) Access to Rich Markets
Indian exporters can now sell products more easily in high-income European markets.
Major sectors expected to benefit:
- Pharmaceuticals
- Textiles and garments
- Engineering goods
- Chemicals
- Processed food
- Marine products
(2) Large Investment Commitment
EFTA countries have promised $100 billion investment in India over 15 years.
This investment will support:
- Manufacturing
- Research and development
- Renewable energy
- Life sciences
- Digital technology
It is also expected to create around 1 million direct jobs in India.
(3) Tariff Reduction
Under the agreement:
EFTA commitments
- Cover 92.2% tariff lines
- Include 99.6% of India’s exports
India’s commitments
- Cover 82.7% tariff lines
- Include 95.3% of EFTA exports
But some sensitive sectors are protected, such as:
- Dairy
- Soya
- Coal
- Some agricultural products
Also, gold import duty remains unchanged.
(4) Technology and Industrial Growth
The agreement will help India get access to:
- Advanced machinery
- Precision equipment
- High-quality industrial components
This can help Indian industries:
- Improve production quality
- Reduce costs
- Join global supply chains
(5) Boost to Services Sector
- India’s services sector will also gain benefits.
- The agreement supports cooperation in:
- IT and IT-enabled services
- Professional services
- Knowledge industries
- It also allows Mutual Recognition Agreements (MRAs) for professions like:
- Nursing
- Chartered Accountancy
- Architecture
- This makes it easier for professionals to work in partner countries.
SUPPORT FOR MSMEs & STARTUPS
The agreement opens opportunities for:
- MSMEs
- Start-ups
- Technology firms
Possible benefits:
- Technology transfer
- Joint ventures
- Collaboration with specialised European firms
This helps Indian companies move up the value chain and become globally competitive.
INCLUSIVE GROWTH IMPACT
- TEPA also focuses on inclusive economic growth.
It can benefit:
- Women entrepreneurs
- Youth entrepreneurs
- Farmers
- Fishermen
- Small businesses
Examples of possible export gains:
- Maharashtra – grapes
- Karnataka – coffee
- Kerala – spices and seafood
- North-East India – horticulture products
This connects local producers to global markets.
ROLE IN INDIA’S EXPORT TARGET
India aims to achieve by 2030:
- $1 trillion merchandise exports
- $1 trillion services exports
TEPA supports this goal by:
- Opening advanced markets
- Attracting investment
- Strengthening manufacturing capacity
WHY TEPA IS IMPORTANT FOR INDIA?
The agreement helps India in multiple ways:
- Expands market access
- Brings foreign investment
- Improves technology and manufacturing
- Creates jobs
- Strengthens global supply chain integration
Overall, it supports India’s long-term vision of becoming a developed country (Viksit Bharat) by 2047.
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