India-EFTA Trade Agreement: $100 Billion Investment Commitment and Reduced Duties on European Products Starting October 1

The free trade agreement between India and the European Free Trade Association (EFTA) will become effective from Wednesday, bringing India a substantial investment commitment of USD 100 billion over 15 years. In return, India will reduce or eliminate duties on various European products including Swiss watches, chocolates, and cut and polished diamonds.

The EFTA consists of four nations: Iceland, Liechtenstein, Norway, and Switzerland. The agreement, officially named the Trade and Economic Partnership Agreement (TEPA), was signed on March 10, 2024.

Indian consumers will benefit from access to premium Swiss goods at lower prices as India gradually phases out customs duties on these products over a 10-year period. These include high-quality watches, chocolates, biscuits, and clocks.

The investment commitment from EFTA includes USD 50 billion within the first decade after implementation, with another USD 50 billion in the subsequent five years. This significant investment is expected to generate one million direct jobs in India, marking an unprecedented pledge in India's trade agreement history.

The TEPA includes a provision allowing India to re-balance or suspend duty concessions if the promised investments do not materialize. Commerce and Industry Minister Piyush Goyal confirmed that TEPA will take effect from October 1.

Under the agreement, India is offering concessions on 82.7 percent of its tariff lines, covering 95.3 percent of EFTA exports, with gold constituting over 80 percent of these imports. Sensitive sectors like dairy, soya, coal, and certain agricultural products remain excluded from duty concessions.

In the services sector, India has offered 105 sub-sectors to EFTA countries, including accounting, business services, computer services, distribution, and health services. Conversely, India has secured commitments in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland.

Indian service sectors expected to benefit include legal, audio-visual, R&D, computer, accounting, and auditing services. The agreement also provides Indian exporters an opportunity to integrate into European Union markets, as over 40 percent of Switzerland's global services exports go to the EU.

Gulzar Didwania, Partner at Deloitte India, highlighted the strategic opportunities from TEPA: "Swiss pharma and medical devices can complement India's medical eco-system; precision machinery from Switzerland and Liechtenstein can strengthen Make in India supply chains; Norway can advance green maritime and carbon management; and Iceland's renewable energy expertise can support industrial decarbonization."

TEPA represents India's 14th trade agreement and its first with developed Western nations. It is the fifth agreement under Prime Minister Modi's government, following pacts with Mauritius, UAE, UK, and Australia. Advanced negotiations continue with the US, Oman, EU, Chile, New Zealand, and Peru.

India's exports to EFTA increased by 1.22 percent to USD 1.97 billion in 2024-25, while imports rose to USD 22.44 billion. The total bilateral trade reached USD 24.41 billion last fiscal year, with EFTA enjoying a trade surplus of USD 20.47 billion.

Switzerland dominates this trading relationship, accounting for USD 1.47 billion in exports and USD 21.8 billion in imports in 2024-25. Trade volumes with the other EFTA nations are considerably smaller.

From April 2000 to June 2025, India has received USD 10.87 billion in foreign direct investment from Switzerland, USD 54.07 million from Iceland, USD 110.26 million from Liechtenstein, and USD 941.81 million from Norway.

The EFTA functions as an inter-governmental organization promoting free trade and operates independently from the European Union. India is separately negotiating a comprehensive free trade agreement with the 27-nation EU bloc.