A new chapter in India‑Europe trade relations

On 1 October 2025, India’s Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) — comprising Switzerland, Norway, Iceland and Liechtenstein — is officially operational. This marks India’s first trade pact with a group of developed European economies. The agreement was signed on 10 March 2024 and now enters into force after ratification by all parties.

Key Provisions & Commitments

The agreement provides for phased tariff reductions on goods, preferential access in key sectors (e.g. pharmaceuticals, textiles, engineering goods) and investment facilitation.

It includes provisions for services trade, intellectual property rights, and dispute resolution.

EFTA countries are expected to commit investments worth US$ 100 billion over 15 years in India, enhancing technology transfer and market integration.

Strategic & Economic Significance

For India, TEPA opens up access to high-income European markets with stronger margins and technological demand.

It can boost Indian exports in areas such as pharma, chemicals, auto components and gems & jewellery, and link them to European supply chains.

The pact helps diversify India’s trade partners beyond traditional blocs, and is part of India’s broader strategy to deepen ties with the Global North.

Challenges & Risks

Indian firms may struggle with compliance to high-quality, regulatory and standards regimes in Europe (non‑tariff barriers).

Domestic industries might face pressure from cheaper imports, requiring adequate safeguards.

Implementation of joint commitments (e.g. intellectual property, dispute resolution) must balance sovereignty concerns and investor confidence.