India–EFTA Pact To Take Effect From October 1
India’s long-awaited trade deal with the European Free Trade Association (EFTA) will officially begin on October 1, 2025. The pact, formally known as the Trade and Economic Partnership Agreement (TEPA), was signed in March 2024 after 16 years of negotiations.
Investment Commitments And Economic Goals
Under the agreement, EFTA member countries — Iceland, Liechtenstein, Norway, and Switzerland — have pledged to invest $100 billion in India over the next 15 years. The pact is expected to generate around 1 million direct jobs in India over the same period.
Tariff Reforms And Exemptions
As part of TEPA, India will reduce or eliminate tariffs on about 80–85 percent of goods from EFTA countries. EFTA nations, in turn, will gain duty-free or concessional market access for nearly 99 percent of Indian exports. Certain sensitive sectors like dairy, some agricultural items, and gold are excluded from full tariff liberalisation to protect domestic industries.
Strategic Significance And Challenges
This is India’s first major trade agreement with a European bloc and differs from earlier pacts in that market access is tied to investment. While incremental tariff gains may be modest (as EFTA nations already maintain low import duties), the investment linkage is seen as the key value driver. However, challenges remain — including implementation, regulatory alignment, and ensuring the promised investments materialise.
