India-EFTA trade deal to come into force from October 1

In a landmark moment for India’s trade and economic diplomacy, Union Commerce and Industry Minister Piyush Goyal announced that the India-EFTA Free Trade Agreement (FTA) will come into effect on October 1, 2025. Officially called the Trade and Economic Partnership Agreement (TEPA), the pact was signed on March 10, 2024, after a prolonged negotiation period spanning 16 years and involving 21 rounds of discussions between India and the European Free Trade Association (EFTA).

The EFTA bloc, comprising Switzerland, Norway, Iceland, and Liechtenstein, represents a significant global economic group, despite having a relatively small population of around 13 million. With a combined GDP exceeding $1 trillion, the bloc ranks as the ninth-largest merchandise trader and fifth-largest in commercial services worldwide. Among these nations, Switzerland stands out as India’s largest trading partner within the group.

A core highlight of the agreement is EFTA’s unprecedented investment commitment of $100 billion to India over the next 15 years. This will be rolled out in two phases:

• $50 billion in the first 10 years after the agreement takes effect, and

• the remaining $50 billion in the following five years.

According to Minister Goyal, this pledge is a first-of-its-kind in India’s trade history, and is expected to generate 1 million direct jobs, positioning the agreement as a strategic growth catalyst for the Indian economy.

Download Pdf | EFTA-India Trade and Economic Partnership Agreement

In exchange, India has agreed to reduce or eliminate tariffs on 82.7% of its tariff lines, which cover 95.3% of EFTA’s exports to India. A substantial portion of these imports, over 80%, consists of gold, a high-value commodity.

Products from EFTA countries—particularly Switzerland—such as luxury watches, chocolates, biscuits, and cut and polished diamonds, will gradually see lower customs duties phased out over a 10-year period, making them more accessible to Indian consumers.

However, India has also taken protective measures for sensitive sectors. Notably, it has excluded certain agricultural products and gold imports from the broader liberalization process, thereby safeguarding domestic farmers and critical economic sectors. These carve-outs reflect India’s cautious and strategic approach to market access. Another key example is India's decision to reject EFTA’s proposal on "data exclusivity". Had it been accepted, this provision would have delayed Indian pharmaceutical companies from producing generic versions of off-patent drugs, potentially affecting the country’s vital role in affordable medicine production.

By resisting this clause, India ensured continued support for its robust generic drug industry, which supplies a large portion of the world's low-cost medicines.

Despite the agreement’s ambitious scope, there are certain limitations and challenges. A report by the Global Trade Research Initiative, a New Delhi-based think tank, highlighted that Switzerland’s new policy—effective from January 1, offering zero tariffs on industrial goods for all countries—could erode the competitive advantage India expected to gain under this FTA. Furthermore, Indian agricultural exports are still likely to face hurdles entering Swiss markets due to complex tariff structures, stringent quality standards, and cumbersome approval processes. These factors may limit market penetration despite tariff concessions.

In the services sector, the agreement is remarkably comprehensive. India has offered market access in 105 sub-sectors including accounting, business and computer services, distribution, and health care. In return, Indian professionals will gain access to 128 sub-sectors in Switzerland, 114 in Norway, 110 in Iceland, and 107 in Liechtenstein.

This reciprocal commitment is expected to benefit Indian exporters in domains such as legal services, audio-visual production, research and development, software engineering, and auditing. Importantly, Switzerland’s strategic location and trade links with the European Union—which receives over 40% of Switzerland’s global services exports—could enable Indian firms to use Swiss partnerships as a gateway to the broader EU market.

Trade volumes between India and EFTA reached $24.4 billion in FY 2024–25. Of this, India’s exports were approximately $2.8 billion, while imports from EFTA countries stood at around $22 billion. With Switzerland accounting for the bulk of this trade, the bilateral economic relationship is already substantial. More than 300 Swiss companies—including Nestlé, Holcim, Sulzer, and Novartis, as well as financial institutions like UBS Bank—operate in India. On the flip side, Indian IT firms such as TCS, Infosys, and HCL have a significant presence in Switzerland, reflecting growing synergies between both economies.

India anticipates notable gains in exports of pharmaceuticals, garments, chemicals, and industrial machinery, while EFTA countries will benefit from increased access in processed food and beverages, engineering goods, medical devices, and transport-related sectors. Minister Goyal has reiterated that India’s engagement in trade agreements with developed countries is not about competing, but about complementing each other's strengths. He underlined that India is no longer entering agreements passively, but is asserting itself based on its large domestic demand, industrial capability, and skilled workforce.

Positioning the TEPA in the context of India’s long-term development vision, Goyal connected the agreement to the goal of Viksit Bharat (Developed India) by 2047. At the ASSOCHAM First Managing Committee Meeting for FY 2025–26, he addressed industry leaders and entrepreneurs, calling for a mindset transformation within the Micro, Small, and Medium Enterprises (MSME) sector. He emphasized the need for collaboration between MSMEs and large firms, focusing on research, innovation, product quality, and global scalability. Goyal encouraged MSME players to actively communicate with the government about non-tariff barriers—such as regulatory complexity or procedural delays—that hinder their international competitiveness.

Goyal also stressed the importance of resilient supply chains, particularly in light of global disruptions caused by the COVID-19 pandemic. Drawing attention to recent export bans on critical inputs like permanent magnets and fertilizers by various countries, he cautioned that nations that fail to safeguard their supply chains will inevitably face setbacks. He reaffirmed India’s intent to build domestic capacity, reduce dependency on imports, and scale up local industries to meet global standards.

The India-EFTA Trade and Economic Partnership Agreement represents a major strategic win for India. With long-term investment guarantees, meaningful job creation potential, and expanded market access, the agreement strengthens India’s economic positioning on the global stage. While some limitations remain—particularly in agriculture and overlapping tariff benefits—its wide-ranging scope across goods, services, and investment channels makes it a landmark step forward in India’s calibrated yet ambitious global trade journey.