From October 1, India’s new trade agreement with the European Free Trade Association (EFTA) will officially come into force. The deal is not just about cheaper Swiss chocolates or watches. It carries a rare $100 billion investment commitment over 15 years, something no other Indian trade pact has ever secured.
EFTA is a four-nation bloc comprising Switzerland, Norway, Iceland and Liechtenstein. The pact, formally called the Trade and Economic Partnership Agreement (TEPA), was signed on March 10, 2024.
What changes for Indian consumers
For Indian shoppers, this is where things get tangible:
Swiss watches, chocolates, biscuits, and clocks will gradually become cheaper as India phases out customs duties over the next decade.
Wines, apparel and cut and polished diamonds will also see duty cuts.
Over time, tariffs will fall on everything from Swiss machinery and medical equipment to fish oils and even smartphones.
According to PTI, the Global Trade Research Initiative (GTRI) notes that India will drop tariffs to zero immediately on many medicines, dyes, and industrial goods, and within 5–10 years on products ranging from tuna and olive oil to medical devices.
What India gains on the export front
The concessions are not one-sided. According to PTI, Indian exporters are eyeing new opportunities across multiple sectors:
- Labour-intensive industries like textiles, marine products, leather, toys, and gems and jewellery gain greater access.
- Agri exports including tea, coffee, fruits and processed food products will benefit, particularly in Norway and Switzerland which together account for 99 percent of India’s farm shipments to EFTA.
- High-tech exports such as medical electronics, diagnostic devices, smart sensors, and EV components could tap into Europe’s high-income markets.
- With Switzerland acting as a services hub to the EU, 40 percent of its services exports head there, Indian firms can also use it as a springboard to reach European Union customers.
The show-stopper is the $100 billion investment pledge:
$50 billion within the first 10 years, another $50 billion in the following five.
The commitment is designed to create one million direct jobs in India. Crucially, the pact allows India to suspend tariff concessions if these investments do not materialise, making it the first Indian FTA with such a safeguard clause.
The sectors in play
Deloitte’s Gulzar Didwania told PTI how each EFTA nation brings something to the table:
- Switzerland: Pharma, medical devices, precision machinery.
- Liechtenstein: Industrial automation for Make in India supply chains.
- Norway: Green maritime, offshore wind, digital ports, carbon management.
- Iceland: Renewable power, geothermal energy, industrial decarbonisation.
This aligns neatly with India’s manufacturing ambitions, energy transition and services growth.
The politics of trade
Commerce Minister Piyush Goyal confirmed on Monday that TEPA takes effect October 1. This will be the Modi government’s fifth trade pact, after Mauritius, UAE, UK and Australia. Talks are ongoing with the US, EU, Oman, Chile, New Zealand and Peru.
Notably, EFTA members are not part of the EU, they formed their bloc in the 1960s as an alternative for states that didn’t want to join the European Community. That distinction matters because India is also negotiating a much larger FTA with the EU itself.
The numbers game
According to PTI, India’s exports to EFTA stood at $1.97 billion in 2024-25, while imports hit $22.44 billion, leaving a trade deficit of $20.47 billion. Switzerland dominates this trade, accounting for nearly all of India’s imports from the bloc—mostly gold.
On the investment side, Switzerland alone has poured in $10.87 billion in FDI since 2000, compared with Norway’s $941 million, Iceland’s $54 million and Liechtenstein’s $110 million.
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