India’s Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) is on track to become operational by the end of 2025, according to Commerce and Industry Minister Piyush Goyal. The agreement, signed on March 10, 2024, aims to enhance trade and investment between India and EFTA members—Switzerland, Norway, Iceland, and Liechtenstein.

Progress Towards Implementation

Minister Goyal highlighted significant advancements in the ratification process, particularly in Switzerland. “The Swiss Council of States has approved the agreement, and it now awaits approval from their National Council,” he stated. He anticipates the agreement will enter into force by autumn 2025, signaling strong political support within Switzerland for TEPA.

Key Provisions of TEPA

Under TEPA, EFTA countries have pledged to invest $100 billion in India over 15 years—$50 billion within the first decade and an additional $50 billion in the subsequent five years. This investment is expected to generate approximately one million direct jobs in India, marking a significant commitment in India’s trade agreements. In exchange, India will reduce or eliminate customs duties on various products from EFTA nations, including Swiss watches, chocolates, and cut and polished diamonds, over a ten-year period.

Safeguards and Market Access

The agreement includes provisions allowing India to suspend duty concessions if the anticipated investments do not materialize, ensuring that the deal remains mutually beneficial. Indian consumers can look forward to access to high-quality Swiss products at more affordable prices as tariffs are gradually reduced.

Ratification Process and Timeline

The implementation timeline accounts for the comprehensive ratification procedures required in each EFTA member country. Unlike India, where such agreements are approved by the Union Cabinet, EFTA nations require parliamentary consent. This process is expected to conclude by late 2025, aligning with Minister Goyal’s projected timeline for the agreement’s activation.

Implications for India-EFTA Relations

The activation of TEPA is poised to strengthen economic ties between India and EFTA countries, fostering increased trade and investment flows. The substantial investment commitments and duty concessions are expected to stimulate economic growth, create employment opportunities, and provide consumers with access to a broader range of high-quality products.

Conclusion

As the ratification process advances, both India and EFTA nations are preparing for the implementation of TEPA, which promises to usher in a new era of economic collaboration. The anticipated activation by the end of 2025 reflects a shared commitment to open, fair, and equitable trade, with significant benefits projected for all parties involved.