India is set to unlock a massive wave of foreign investments from Europe’s four-nation Efta bloc — Switzerland, Norway, Iceland, and Liechtenstein — worth up to $250 billion over the next 15 years, under a landmark trade pact that went into effect last week.
The Trade and Economic Partnership Agreement (Tepa), operational from October 1, marks a milestone in India’s economic diplomacy with Europe, blending market access with a firm commitment for $100 billion in FDI inflows, which Commerce and Industry Minister Piyush Goyal believes could scale up by another $150 billion as confidence deepens.
At the Prosperity Summit in New Delhi celebrating the Tepa’s entry into force, Goyal described the agreement as a “trusted partnership between friends” and a “beacon of stability and certainty” in a volatile global trade environment.
The pact, the first of its kind for India to include a concrete investment pledge, is expected to generate one million direct jobs while boosting India’s exports to the advanced European bloc across key sectors such as engineering, pharmaceuticals, clean energy, food processing, and digital services.
Calling the Efta pact “a defining moment in India’s engagement with Europe,” Goyal said it reflects a shared belief in transparency, fairness, and sustainable growth. “The entire population of the four Efta nations is less than Mumbai city’s, but their innovation and financial strength combined with India’s scale and talent will create boundless economic opportunities,” he noted. He underscored India’s emergence as a global innovation hub, home to nearly 2,500 global capability centres that power the world’s top corporations. “Our data costs are only three per cent of those in the US and less than 10 per cent of the global average — this competitive edge is what attracts investors,” he added.
The agreement is expected to trigger transformative partnerships in precision manufacturing, finance, clean energy, shipping, and technology. Switzerland’s strength in finance and pharmaceuticals, Norway’s expertise in maritime and renewable energy, Iceland’s clean-tech innovation, and Liechtenstein’s advanced engineering capabilities will complement India’s market size, youth talent, and manufacturing capacity.
Swiss State Secretary for Economic Affairs, Helene Budliger Artieda, described Tepa as “more than a legal document — a win-win partnership.” She said, “The strong presence of Swiss, Norwegian, Icelandic and Liechtenstein firms at the Prosperity Summit reflects their belief in India’s growth story. They see the potential, they want to invest, and they are ready to be part of India’s economic transformation.”
Commerce Secretary Rajesh Agrawal added that Tepa signals “the collective wisdom and will to strengthen free and fair trade.” He called it the beginning of a “new era of shared growth, innovation, and prosperity,” noting that India’s ascent as the world’s fourth-largest economy, soon to be the third, underpins the global confidence reflected in the investment commitments.
Beyond market access, Tepa will streamline collaboration in services, skilling, and research. It creates clearer pathways for professional mobility and digital service delivery, along with a roadmap for mutual recognition agreements that will allow Indian professionals — particularly in IT, healthcare, and finance — to access European markets more easily. MSMEs are expected to gain from reduced compliance costs, standards cooperation, and buyer–supplier matchmaking, while farmers and agri-exporters will benefit from tariff advantages in niche European markets for premium coffee, marine products, and processed foods.
Goyal said the government will work closely with industry chambers such as CII, Ficci, and Assocham to ensure Tepa’s benefits reach the grassroots. “This is not merely a tariff agreement — it is a framework of trust that reduces the cost of uncertainty and signals to global investors that India is open for business with long-term stability,” he said, adding that India’s commitment to Antyodaya, or inclusive prosperity, ensures that growth benefits every section of society.
While India’s trade momentum with Europe gathers pace, global tariff challenges — particularly from the US — cast a shadow on some export sectors. Washington’s renewed tariff push, covering key Indian goods such as steel and pharmaceuticals, has reinforced New Delhi’s resolve to diversify its trade basket and deepen partnerships through balanced free trade agreements like Tepa and Cepa (Comprehensive Economic Partnership Agreement) with the UAE.
The UAE-India Cepa, operational since May 2022, has already yielded tangible benefits — bilateral trade surged to $85 billion in 2024, up 15 per cent year-on-year, making the UAE India’s second-largest trading partner. The pact helped Indian exporters gain duty-free access to the UAE market for 97 per cent of tariff lines and has catalysed investments in logistics, renewable energy, and fintech. Officials believe Tepa will have a similar transformative impact, particularly in attracting European FDI and technology partnerships.
The agreement, experts say, is expected to become one of the most consequential trade partnerships in India’s history — deepening its integration with global markets and strengthening its role as a bridge between Europe, the Gulf, and Asia.
India’s push for diversified, mutually beneficial trade agreements aligns with its ambition to boost annual exports to $2 trillion by 2030 and attract record foreign investments in infrastructure and manufacturing. Analysts say Tepa, by combining market access with investment assurance, sets a new global benchmark for India’s economic diplomacy. It also positions New Delhi as a credible trade partner for Europe at a time when supply chain resilience, climate cooperation, and digital transformation dominate global economic priorities.
“Tepa is not an end — it is the beginning of an endless partnership. It symbolises India’s confidence, Europe’s faith, and our shared belief that prosperity must reach the last person in society,” Goyal added.
