EFTA India Free Trade Agreement (TEPA): How India and Europe Are Redrawing the Trade Map
On March 10, 2024, India marked a pivotal moment in its economic history with the signing of a Free Trade Agreement that promises to significantly enhance its trade relations on a global scale. After 16 years of intricate negotiations and 21 rounds of detailed discussions, India forged this agreement with four prominent European economies: Switzerland, Norway, Iceland, and Liechtenstein, collectively known as the European Free Trade Association (EFTA).
The newly established agreement, called the Trade and Economic Partnership Agreement (TEPA), is crafted to create a framework for a robust and mutually beneficial partnership. It seeks to leverage India’s vast market potential alongside the precision and innovation characteristic of European industries. By reducing tariffs, simplifying trade regulations, and enhancing cooperation in various sectors such as technology, agriculture, and services, TEPA is designed to stimulate economic growth, boost exports, and attract foreign investment.
This landmark agreement is not just about trade; it is a strategic alliance that envisions a deepening of economic ties, fostering collaboration on sustainability and technological advancements. As India strengthens its relationships with these key European nations, it positions itself as an increasingly influential player in the global economy, aiming for a more integrated and competitive market presence.
At ET2C International, we specialise in helping brands develop a global sourcing strategy that drives efficiency, compliance, and cost optimisation. With offices across India, China, and Vietnam, ET2C delivers international sourcing solutions that connect global demand with trusted local suppliers, creating sustainable and scalable supply chains for clients across retail, manufacturing, and consumer goods.
Free Trade Agreement : A New Kind of Trade Deal
This is not a typical tariff-cutting exercise. TEPA is focused on trust, innovation, and long-term investment. It aims to:
- Build deeper manufacturing ties
- Encourage foreign direct investment (FDI)
- Open new European markets for Made-in-India exports
- Bring technology, sustainability, and skills to Indian industries
For global businesses, this is a chance to reimagine their global sourcing strategy and international sourcing partnerships in ways that are resilient and aligned with modern trade dynamics.
Free Trade Agreement: The Long Road to Partnership
The agreement took sixteen years to conclude. When talks began, India’s manufacturing landscape looked very different. By the time TEPA was signed, India had become one of the world’s fastest-growing manufacturing economies, and Europe was actively seeking trusted alternatives to China.
Free Trade Agreement : What the EFTA–India TEPA Actually Does
TEPA aims to reduce tariffs across thousands of goods, simplify export procedures for MSMEs, support joint research and technology partnerships, and strengthen supply-chain collaboration across sectors such as healthcare, clean energy, and engineering. TEPA complements India’s Make in India and PLI initiatives. See more on the official site: Invest India – Manufacturing Renaissance through PLI Schemes
India–Europe trade: Switzerland: Small Country, Big Partner
Switzerland stands out among EFTA countries as a deep investor in India. It ranks among India’s top investors, contributing over $10.8 billion in cumulative investment. Swiss firms operate across pharmaceuticals, precision engineering, consumer goods, and finance, and more than 340 Swiss companies employ roughly 150,000 professionals in India. Read more: (Economic Times – PLI Schemes Attract ₹1.76 Lakh Cr Investment)
India–Europe trade : India–Switzerland 2024
India’s exports to Switzerland were approximately $2.1 billion, while imports from Switzerland stood at $2.8 billion (excluding gold). India exports pharmaceuticals, machinery, chemicals, apparel, and leather goods; Swiss precision tools, medical devices, and specialised machinery dominate imports. More: (Reuters – India’s Manufacturing Incentives Progress)
A Win for “Make in India”
TEPA strengthens Make in India in practical ways.
It provides wider market access for exporters, accelerates technology partnerships (especially in green energy and healthcare), empowers MSMEs by simplifying export compliance, and supports job creation through increased investment. This isn’t just about trade figures, it’s about transforming how and where value is created.
EFTA India: What’s in It for EFTA Countries
For EFTA members, India represents something rare: A massive market that’s open, growing, and tech-savvy. They gain:
- Access to 1.4 billion consumers
- Strong demand for European machinery, medical devices, and chemicals
- A production base that helps diversify beyond China
- Partnerships for sustainable manufacturing and green technology
It’s a strategic win, combining economic and geopolitical benefits.
Free Trade Agreement : A Step Toward India’s Global Trade Vision
TEPA is part of a broader strategy to diversify India’s trade partnerships.
Recent and ongoing agreements with the UAE, Australia, and others show a clear pattern: India is building a balanced web of trade relations that enhances export-led growth and supply-chain resilience.
Official update: (PIB India – PLI Scheme Update)
EFTA India Challenges Along the Way
Several practical challenges need to be addressed:
- Regulatory Alignment: Indian exporters must comply with Europe’s stringent standards regarding quality, packaging, and sustainability.
- Tariff Balance: It will require ongoing coordination to find a fair compromise on tariffs, particularly for sensitive sectors.
- Infrastructure Readiness: India’s logistics, ports, and digital trade systems must be scaled to accommodate larger export volumes.
- ESG and Traceability: European buyers increasingly demand sustainable sourcing and transparent supply chains. Although India is making rapid progress in these areas, continued investment is essential.
This is where sourcing specialists like ET2C International come in, helping global brands bridge the gap by combining local expertise with international quality control.
Global sourcing and trade partnerships: Opportunities for Global Brands and Buyers
For global businesses, TEPA delivers a range of valuable sourcing advantages. By significantly lowering landed costs through reduced duties, companies can optimise their budget and improve their overall financial performance. Additionally, TEPA fosters dependable supplier networks within thriving Indian manufacturing hubs, ensuring consistent product quality and timely deliveries. This network, in turn, contributes to improved cost efficiency across operations.
Moreover, TEPA encourages ethical and sustainable sourcing practices from India, making it not only a feasible option but also an appealing choice for socially conscious businesses looking to make a positive impact.
To facilitate access to these benefits, ET2C provides critical support to global buyers through comprehensive supplier audits, rigorous compliance checks, and seamless logistics coordination, ensuring that each step of the sourcing process is efficient and reliable. Learn more: ET2C India Sourcing Solutions
EFTA India: The Future of TEPA: What Lies Ahead
Once fully implemented, the EFTA–India Free Trade Agreement (FTA) could:
- Triple bilateral trade within a decade
- Expand cooperation in artificial intelligence (AI), digital trade, and clean energy
- Create hundreds of thousands of new jobs in India
- Encourage sustainable, innovation-driven growth across various sectors
The Trade and Economic Partnership Agreement (TEPA) also serves as a model for future trade agreements, fostering a partnership that prioritises not only profit but also sustainability, innovation, and shared values.
ET2C’s Take: Turning Policy into Practice
Policy matters, but execution matters more.
ET2C helps brands convert TEPA’s policy benefits into operational results. From supplier discovery and quality management to ESG and logistics, ET2C supports end-to-end readiness for trade between Europe and India. Read more: ET2C Global Supply Chain Services.
We’re helping brands across Europe and North America tap into India’s new trade momentum responsibly and profitably.
EFTA India: The Big Picture: A Trade Deal That Redefines Growth
The EFTA–India TEPA represents more than just a diplomatic achievement; it signals India’s growth as a strategic manufacturing partner.
For India, this agreement promotes export-led growth and creates job opportunities. For EFTA nations, it provides access to one of the world’s most dynamic markets.
As global supply chains transform, India is not merely adhering to existing patterns; it is actively reshaping them.
Visit ET2C India Sourcing Solutions to discover how we help businesses capitalise on India’s trade evolution through a targeted global sourcing strategy and international sourcing expertise. To start a deeper discussion about delivering the decisive role of Indian sourcing and Global Supply Chain Services in your organisation, drop us a line contact@et2cint.com
Anishi Gupta
Position: Digital Marketing Specialist
Anishi Gupta is a Digital Marketing Specialist focused on performance marketing, content strategy, and data-driven growth at ET2C LinkedIn or anishi.g@et2c.com.
