India–EFTA FTA: Opening Doors to $100 Billion and 1 Million Jobs
India’s trade diplomacy is entering a decisive phase. With the India–EFTA Trade and Economic Partnership Agreement (TEPA) set to take effect from October 1, 2025, the country has signed its first free trade pact with a developed Western bloc. The European Free Trade Association (EFTA) — comprising Switzerland, Norway, Iceland, and Liechtenstein — may not match the size of the European Union, but it brings unparalleled financial muscle, precision industries, and global credibility. What makes this pact historic is not merely the tariff concessions, but the headline promise: $100 billion in investment and 1 million direct jobs for India over the next 15 years. If executed well, this agreement could reshape India’s growth trajectory and set a new standard for how India negotiates with advanced economies.
The Deal at a Glance
Unlike traditional FTAs, which focus narrowly on tariff reduction, TEPA is designed as a hybrid model — investment-for-access. India has agreed to gradually reduce tariffs on high-value imports such as Swiss watches, chocolates, machinery, and pharmaceutical products. In return, the EFTA bloc has committed to making a good-faith effort to channel $100 billion worth of investments into India, structured as $50 billion over the first decade and another $50 billion over the following five years. The pact also sets an employment target of creating 1 million direct jobs, linking investment promises to India’s pressing demographic needs.
Why $100 Billion Matters
To understand the significance of this figure, it must be placed against the backdrop of India’s existing FDI flows. At its peak, India attracted about $85 billion in FDI in FY 2021–22. A guaranteed inflow of $100 billion over 15 years may sound modest compared to annual peaks, but its value lies in predictability. Unlike volatile capital markets or opportunistic portfolio inflows, these investments are expected to be tied to long-term projects, job creation, and industrial expansion. For India, this represents a cushion against external shocks and a structured commitment that can help in strategic planning for manufacturing hubs, infrastructure corridors, and green energy zones.
The 1 million jobs target makes this deal particularly relevant. With over 12 million people entering India’s workforce annually, even a fraction of this goal achieved through high-quality employment in manufacturing, logistics, and R&D could transform regional economies. The promise of jobs tied directly to a trade pact sets TEPA apart from other FTAs where employment outcomes have remained vague.
Sectoral Opportunities
The opportunities created by TEPA span multiple sectors that align closely with India’s developmental priorities:
Manufacturing and Precision Engineering: Swiss and Norwegian firms are expected to bring cutting-edge technology, boosting India’s domestic manufacturing capabilities under the “Make in India” campaign.
Pharmaceuticals and Biotech: With Switzerland’s global dominance in pharmaceuticals, joint ventures and R&D partnerships could elevate India’s already strong generic drug industry into higher-value segments.
Financial Services: EFTA members like Switzerland and Liechtenstein, known for financial expertise, will gain clearer access to India’s banking and insurance markets. This could introduce more competition and innovation in India’s financial ecosystem.
Food Processing and Clean Energy: Investments in food supply chains and renewable energy will help modernize rural economies and contribute to India’s sustainability goals.
Transport and Logistics: Improved infrastructure, backed by foreign capital, can lower India’s internal trade costs and boost export competitiveness.
The Strategic Upside
Beyond the economic numbers, TEPA carries strategic weight. For the EFTA countries, particularly Switzerland, this deal secures early access to India’s vast consumer market before the European Union, the UK, or the US finalize their own trade agreements with New Delhi. For India, this pact demonstrates credibility — it shows that the country is capable of negotiating high-value deals with the developed world on its own terms.
It also positions India as a preferred alternative to China for global supply chains. By offering a combination of market access and political stability, India can attract European capital that is increasingly wary of Beijing’s regulatory unpredictability. In this sense, TEPA is not just an FTA; it is a diplomatic and strategic milestone.
Addressing the Caveats
Of course, optimism must be tempered with realism. The fine print of the agreement reveals that the $100 billion investment is framed as an “aim to” commitment, not a legally binding guarantee. This means the inflows are aspirational, contingent on India creating a conducive environment. To translate promises into outcomes, India must address its well-known hurdles: bureaucratic red tape, policy inconsistencies, infrastructure gaps, and regulatory uncertainty.
The pact does, however, give India leverage. If the investment or job targets are not met, India has the option to recalibrate its concessions in later years. This mechanism ensures that the country is not locked into a one-sided deal. If India can ensure smoother ease-of-doing-business reforms and maintain macroeconomic stability, there is every chance the $100 billion figure could not only be achieved but exceeded.
Conclusion
The India–EFTA TEPA is more than just another free trade pact. It is a statement of intent: that India is ready to leverage its vast market not just for cheaper imports but for strategic capital and long-term employment. It shows a maturing of trade diplomacy, where India is no longer a passive recipient of trade rules but an active architect of its own economic narrative. Yes, the deal has its caveats, but if implemented with foresight and efficiency, it could become the template for future FTAs. From Zurich to Delhi, from Swiss watches to Indian jobs, TEPA represents a partnership that can redefine the contours of global trade in India’s favor.
