In a landmark move set to reshape India’s trade and economic landscape, the Free Trade Agreement (FTA) between India and the European Free Trade Association (EFTA) will officially come into effect from October 1, 2025. This is no ordinary trade pact—it brings with it a promise of $100 billion in investment, millions of new jobs, and major benefits for Indian consumers, especially the middle class, in terms of reduced prices on premium products like Swiss watches and chocolates.
What is the India-EFTA Deal?
EFTA is a regional trade bloc consisting of four European countries: Switzerland, Norway, Iceland, and Liechtenstein. On March 10, 2024, India signed the Trade and Economic Partnership Agreement (TEPA) with EFTA, which will now be implemented after more than 16 years of negotiations. The deal was announced by Union Minister Piyush Goyal, who emphasized its historic significance and the enormous time and effort involved in finalizing the agreement.
Although EFTA includes four nations, Switzerland is by far India’s most significant trade partner among them. While trade volumes with Norway, Iceland, and Liechtenstein have been relatively small, this agreement is expected to rapidly increase business activity with those countries too.
Investment and Job Creation
Under the agreement, EFTA countries will invest $100 billion in India over the next 15 years, with $50 billion coming in the first 10 years, followed by another $50 billion in the next five. The Indian government estimates that this massive influx of foreign direct investment will create at least 10 million direct jobs, making it one of the largest employment-boosting trade deals in India’s history.
Tariff Reductions: Luxury Products to Get Cheaper
Currently, India imposes an average 82.7% tariff on imports from EFTA nations—mostly on high-value items like gold, Swiss watches, chocolates, and polished diamonds. Over the next 10 years, import duties on these goods will be gradually reduced and ultimately removed. This means that Indian consumers can look forward to significant price cuts on luxury products, making high-end Swiss timepieces, premium chocolates, gourmet biscuits, and fine jewelry more affordable for the Indian middle class.
Services Sector Opens Up
As part of the FTA, India has agreed to open up 105 service sectors to EFTA nations. These include crucial areas like IT services, computer consulting, healthcare, distribution, and education. This will allow companies from Switzerland, Norway, Iceland, and Liechtenstein to operate more freely in India’s dynamic services market.
In return, India has secured access to a wide range of services sectors in EFTA countries:
Switzerland: 128 sub-sectors
Norway: 114 sub-sectors
Liechtenstein: 107 sub-sectors
Iceland: 110 sub-sectors
This includes key areas like legal services, accounting, R&D, and IT-enabled services, opening up fresh avenues for Indian firms to export high-value services to Europe.
Strategic Gateway to the European Union
An often-overlooked but crucial benefit of this agreement is the strategic access it provides to the larger European market. Switzerland exports 40% of its goods to the European Union, and Indian companies can leverage this agreement to use Switzerland as a global base for service exports, allowing them easier and more cost-effective access to the EU.
Expected Surge in Trade Volume
In FY 2024-25, the total bilateral trade between India and EFTA stood at $24.4 billion. With the implementation of the FTA, this figure is expected to multiply significantly, as trade barriers are lowered and investment starts pouring in.
Benefits for Consumers and the Economy
Apart from boosting trade and creating jobs, the FTA promises tangible benefits for Indian consumers:
Cheaper luxury goods like Swiss watches, premium chocolates, and high-end diamonds
Improved quality and availability of European products
Greater employment opportunities due to large-scale investments
Expanded export markets for Indian service providers
This agreement is a win-win on multiple fronts—it strengthens India’s global trade presence, enhances its attractiveness as an investment destination, and directly benefits the Indian consumer. With the India-EFTA FTA becoming operational from October 2025, a new chapter in Indo-European economic cooperation is set to begin.
Disclaimer:
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