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BUSINESS & TRADE OCTOBER 09, 2026 | The Indian Eye 39

India-EFTA trade deal

takes on new significance

As the global trading system comes under pressure, India’s partnership with EFTA

offers a model of market access, investment and economic diversification

OUR BUREAU creased trade activity. According to
Goyal, exports of motor cars and oth-
New Delhi / Milwaukee, WI
er motor vehicles, heavy waters and
ndia’s trade relationship with the moulding patterns have grown signifi-
European Free Trade Association cantly since implementation.
I(EFTA) has completed its first But the real test of TEPA will be
year at a time when the global trad- whether these early gains develop into
ing system is undergoing profound deeper economic integration.
change. The India-EFTA Trade and That question is particularly rel-
Economic Partnership Agreement evant as India moves simultaneously
(TEPA), which came into force on towards a broader trade agreement
October 1, 2025, is therefore more with the European Union. Negotia-
than another free trade agreement. It tions for the India-EU FTA were com-
is part of India’s effort to build a wider pleted earlier this year after talks that
and more diversified network of eco- began in 2007 and were relaunched in
nomic partnerships as the old rules of 2022. The agreement is now moving
global commerce come under increas- towards formal signing and imple-
ing pressure. mentation.
Commerce and Industry Minister Taken together, the EFTA and
Piyush Goyal has described the first EU agreements could significantly
year of TEPA as an important mile- expand India’s economic engage-
stone, highlighting wider market ac- ment with Europe. They also fit into a
cess for Indian exporters and EFTA’s broader strategy of reducing excessive
commitment to promote $100 billion dependence on individual markets
in investments in India over the next and integrating Indian companies
15 years. The agreement is also ex- Union Minister of Commerce and Industry Piyush Goyal meets US Trade Representative more deeply into global supply chains.
pected to help create one million di- Jamieson Greer on the sidelines of the G20 Trade Ministers’ Meeting, in Milwaukee, For India, this diversification is
rect jobs. Wisconsin, on Wednesday (@PiyushGoyal X/ANI Photo) becoming increasingly important. The
The timing could hardly be more emerging trading environment is char-
significant. greater importance. portant feature of India’s trade strat- acterised not only by tariffs but also by
The global trading environment EFTA comprises Switzerland, egy: opening markets while retaining technology competition, supply-chain
is increasingly moving away from Norway, Iceland and Liechtenstein. safeguards for sectors considered stra- vulnerabilities, industrial policy and
the relatively predictable system that India signed TEPA with the four tegically sensitive. geopolitical considerations.
dominated international commerce countries in March 2024, making it The investment commitment may That makes the investment and
for decades. At the G20 Trade Minis- the country’s first free trade agree- ultimately prove even more conse- technology components of TEPA es-
ters’ meeting in Milwaukee, US Trade ment with these developed European quential. EFTA’s target of $100 billion pecially important.
Representative Jamieson Greer ar- economies. The pact covers 14 chap- in investment over 15 years, alongside India’s challenge will be to ensure
gued that the existing international ters, including trade in goods, services, the employment target, links trade lib- that foreign investment translates into
trading architecture was designed for investment promotion, intellectual eralisation directly with India’s man- stronger domestic manufacturing ca-
another era and called for a “new in- property, trade facilitation and sus- ufacturing and investment ambitions. pabilities, technology transfer, skills
ternational economic order”. tainable development. For India, the objective is not and globally competitive Indian com-
Greer pointed to structural excess Its market-access provisions are simply to sell more goods abroad. The panies. The agreement can provide
capacity, forced labour, food security, substantial. EFTA has committed to larger goal is to attract capital, tech- opportunities, but businesses will have
economic coercion and the future of provide access on 92.2 per cent of its nology and expertise that can strength- to use them effectively.
the Most-Favoured-Nation principle tariff lines, covering 99.6 per cent of en domestic production and services. The first year of TEPA is there-
as issues exposing the limitations of India’s exports, including all non-ag- TEPA also seeks to expand In- fore best seen as a beginning rather
the existing framework. Washington ricultural products. India, mean- dian services exports through digital than an outcome.
has itself increasingly relied on tariffs while, has covered 82.7 per cent of delivery, commercial presence and In a global economy where estab-
and bilateral agreements to restruc- tariff lines accounting for 95.3 per professional mobility. Mutual Recog- lished trade rules are being questioned
ture trade relationships and make cent of EFTA exports, while keep- nition Agreements in areas such as and major economies are increasingly
supply chains more resilient. ing sensitive sectors such as dairy, nursing, accountancy and architecture turning towards tariffs, bilateral deals
Against this backdrop, India’s ap- soya, coal and sensitive agricultur- could help Indian professionals gain and strategic supply chains, India’s
proach of expanding bilateral and plu- al products outside or protected. greater access to EFTA markets. growing network of trade partnerships
rilateral trade partnerships assumes That asymmetry reflects an im- There are already signs of in- gives it additional room to manoeuvre.

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