India-EFTA Trade and Economic Partnership Agreement (TEPA)

Context

The India-EFTA Trade and Economic Partnership Agreement (TEPA) recently marked its second anniversary. The agreement was signed in March 2024 and entered into force in October 2025.

Q1. What is the European Free Trade Association (EFTA)?

1. It is an intergovernmental organisation, established in 1960 via Stockholm Convention, that promotes free trade and economic integration among its member countries and with global partners. It is a regional trade organisation outside the European Union.
2. EFTA countries cooperate on trade liberalisation, investment promotion, and economic cooperation with other economies.
3. Member States (4): Iceland, Liechtenstein, Norway and Switzerland. (not members of the European Union).

Q2. What is the India-EFTA Trade and Economic Partnership Agreement (TEPA)?

1. It is a comprehensive trade agreement between India and the four EFTA countries aimed at strengthening trade, investment, and economic cooperation.
2. The agreement aims to enhance market access, promote investment flows, and strengthen economic partnerships.
3. Major Provisions:
   1. Investment Commitment: EFTA countries have committed to invest USD 100 billion in India over 15 years.
   2. Employment Generation: The investment is expected to create around 1 million direct jobs in India.
   3. Trade Liberalisation: The agreement aims to reduce trade barriers and expand market access for goods and services between India and EFTA countries.
   4. Economic Cooperation: TEPA promotes collaboration in areas such as technology, innovation, industrial development and sustainable economic growth.

Conclusion

The India-EFTA TEPA, which came into force in October 2025, represents a major milestone in India’s trade diplomacy by encouraging investment inflows, employment generation, and deeper economic engagement with European economies.

FAQs

Q1. What is the European Free Trade Association (EFTA)? 

The EFTA is a regional trade organisation outside the EU. Its members are Iceland, Liechtenstein, Norway, and Switzerland, focusing on free trade and economic integration.

Q2. What is the India–EFTA Trade and Economic Partnership Agreement (TEPA)? 

Signed in March 2024 and effective from October 2025, TEPA is a comprehensive trade pact between India and EFTA nations to boost trade, investment, and economic cooperation.

Q3. What are the major provisions of the India–EFTA TEPA?

1. Investment Commitment: USD 100 billion over 15 years.
2. Employment Generation: ~1 million direct jobs in India.
3. Trade Liberalisation: Reduced barriers, expanded market access.
4. Economic Cooperation: Collaboration in technology, innovation, and sustainable growth.