The India-EFTA Trade and Economic Partnership Agreement (TEPA) is a comprehensive free trade agreement signed between the Republic of India and the four member states of the European Free Trade Association (EFTA): Iceland, Liechtenstein, Norway, and Switzerland. The agreement is a modern and ambitious concept, representing India's first Free Trade Agreement with these developed European nations.
Discussions for the TEPA began in 2008, and after 16 years and 21 rounds of negotiations, it was formally signed on 10 March 2024. The agreement aims to solve the problem of trade barriers by eliminating or reducing tariffs on the majority of goods and liberalizing trade in services and investment. It is set to enter into force on 1 October 2025.
The mechanism of the TEPA is detailed across 14 chapters. EFTA commits to eliminating tariffs on 92.2% of its tariff lines, covering approximately 99.6% of India's exports. India, in turn, will reduce duties on 82.7% of its tariff lines, covering about 95% of EFTA's exports, while protecting sensitive sectors like dairy and gold imports from full concession. A key, unprecedented provision is a binding commitment from the EFTA states to aim to invest $100 billion in India over 15 years and facilitate the creation of 1 million direct jobs. The agreement also includes provisions for Mutual Recognition Agreements in professional services like nursing and chartered accountants. The EFTA, an intergovernmental organization established in 1960 through the Stockholm Convention, is a related institution that an informed reader should know. The recent change is the signing of this new agreement, which is a strategic shift in India's focus toward Western markets.