Indian Economy News

India-EFTA trade pact: Boosting US$ 100 billion investment and one million jobs

The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA), effective from October 1, 2025, marks a historic milestone as India’s first Free Trade Agreement (FTA) with four developed European nations, Switzerland, Norway, Iceland, and Liechtenstein. The pact commits Rs. 8,87,100 crore (US$ 100 billion) in investments and one million direct jobs over 15 years, making it the first Indian FTA with binding investment and employment targets. The agreement offers extensive market access, with EFTA reducing tariffs on 92.2% of products that account for 99.6% of India’s exports, while India has opened its market to 82.7% of EFTA products, covering 95.3% of EFTA’s exports. Sensitive sectors such as dairy, soya, coal, pharmaceuticals, and agriculture are protected through exclusions or phased tariff reductions. The agreement also facilitates greater trade in services, professional mobility, and Mutual Recognition Agreements (MRAs) in areas such as nursing, accountancy, and architecture.

TEPA is expected to unlock opportunities across sectors, including machinery, engineering goods, processed foods, marine products, and electronics, while boosting exports in chemicals, textiles, and gems and jewellery. Its focus on technology collaboration, intellectual property protection, and sustainability aligns with India’s Make in India and Atmanirbhar Bharat missions. EFTA’s zero-duty concessions, particularly in processed food, marine, and engineering goods, will enhance India’s export competitiveness, while the Rs. 8,87,100 crore (US$ 100 billion) investment commitment will accelerate domestic manufacturing, innovation, and job creation. By blending market access with strategic investment, TEPA positions India as a trusted global trade partner and reinforces its leadership in sustainable and inclusive economic growth.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.