The Free Trade Agreement between India and the four-nation European bloc EFTA will be implemented from October 1, Commerce and Industry Minister Piyush Goyal said on Saturday (July 19, 2025).

The two sides signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024.

Under the pact, India has received an investment commitment of $100 billion in 15 years from the grouping while allowing several products, such as Swiss watches, chocolates, and cut and polished diamonds, at lower or zero duties.

“India-EFTA TEPA to come into effect from 1st October,” Mr. Goyal said in a post on X.

The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.

The bloc has committed an investment of $100 billion — $50 billion within 10 years after the implementation of the agreement and another $50 billion in the next five years — which would facilitate the creation of 1 million direct jobs in India.

This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far.

The commitment is the key substance of the agreement, which took almost 16 years to conclude, for India in return for opening its markets for several products coming from the EFTA nations.

The biggest trading partner of India in the bloc is Switzerland.

India has low trade volumes with the remaining three countries.

In the pact, India is offering 82.7% of its tariff lines or product categories, which cover 95.3% of EFTA exports, of which more than 80% of imports are gold.

Domestic customers will get access to high-quality Swiss products, such as watches, chocolates, biscuits, and clocks, at lower prices as India will phase out customs duties under the trade pact on these goods over 10 years.

In the services sector, the Commerce Ministry has earlier stated that India has offered 105 sub-sectors to the EFTA, like accounting, business services, computer services, distribution and health.

On the other hand, the country has secured commitments in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland.

Segments, where Indian services will get a boost, include legal, audio-visual, R&D, computer, accounting, and auditing.

Further, the pact would provide an opportunity for domestic exporters to integrate into the EU (European Union) markets. Over 40% of Switzerland’s global services exports are to the EU. Indian companies can look to Switzerland as a base for extending their market reach to the EU.

India-EFTA two-way trade was $24.4 billion in 2024-25.

On the tariff negotiations with the U.S., Mr. Goyal said, “Our negotiations strategy hinges on national interest. At no point of time will the Narendra Modi government ever allow national interest to be compromised”.

At the Assocham First Managing Committee Meeting FY2025-26 in Mumbai, the Minister said the world is recognising India’s strength today, and added that “the world is recognising that talent and skill are in India”. And that is what gives us that negotiation leverage”.

Stating that India is negotiating with advanced or developed countries, he said, “We are not trying to do trade deals or focus only on trade deals without competitors. We are looking at complementary economies”.

Later, talking to reporters on the sidelines of the event, Mr. Goyal said that countries which do not take care of their supply chains and ensure that supply chains are resilient will “suffer”.

“… I think India has huge domestic demand. We have imports coming into the country, which can be replaced by developing a domestic industry to scale for high-quality production,” he noted.

And ultimately, COVID taught us a big lesson, the minister said, adding that “the ban on the export of permanent magnets or fertiliser that has been imposed in the last few months teaches us a big lesson”.

Published – July 19, 2025 05:28 pm IST

India and the four-nation European bloc EFTA ink free trade agreement on Sunday, March 10, 2024.
| Photo Credit: X@ANI

India and the four-nation European bloc EFTA on March 10 signed a free trade agreement to promote investments and boost two-way trade in goods and services.

The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.

The agreement has 14 chapters, including trade in goods, rules of origin, intellectual property rights (IPRs), trade in services, investment promotion and cooperation, government procurement, technical barriers to trade and trade facilitation.

“EFTA countries gain market access to a major growth market. Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs…All in all, the TEPA will allow us to make better use of our economic potential and create additional opportunities for both India and the EFTA States,” Federal Councillor Guy Parmelin, speaking on behalf of the EFTA Member States, said.

Under free trade pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.

India and EFTA have been negotiating the pact, officially dubbed the Trade and Economic Partnership Agreement (TEPA), since January 2008. Thirteen rounds of talks were held till November 2013 before negotiations were put on hold.

Both sides resumed the negotiations in October 2023 and concluded it in a fast-track mode.

EFTA countries are not part of the European Union (EU). It is an inter-governmental organisation for the promotion and intensification of free trade. It was founded as an alternative for states that did not wish to join the European community.

India is negotiating a comprehensive free trade agreement separately with the EU, the 27-nation bloc.

India had earlier used the strategy of expediting or fast-tracking FTA negotiations successfully with the UAE and Australia.

India-EFTA two-way trade was $18.65 billion in 2022-23 compared to $27.23 billion in 2021-22. The trade deficit was $14.8 billion in the last fiscal.

Switzerland is the largest trading partner of India followed by Norway in the bloc.

‘It symbolises shared commitment to fair, equitable trade’

Prime Minister Narendra Modi said the India-EFTA trade agreement symbolises our shared commitment to open, fair and equitable trade.

He also said that the global leadership of EFTA countries in innovation and R&D across diverse spheres like digital trade, banking and financial services, and pharma will open up new doors of collaboration.

“Heartiest Congratulations and best wishes to the negotiators and signatories involved in the signing of India-EFTA Trade and Economic Partnership Agreement (TEPA),” Mr. Modi said in a written message.

The Prime Minister’s statement was read by Commerce and Industry Minister Piyush Goyal here in the presence of ministers and officials of EFTA countries.

“In the last 10 years, India’s economy has taken a quantum leap, moving from being the world’s eleventh largest economy to the fifth largest. Our next goal is to make India’s economy in the world,” the Prime Minister said.