Implementation of the India-EFTA Trade and Economic Partnership Agreement (TEPA): UPSC Current Affairs Story Arc

Overview

The India-EFTA Trade and Economic Partnership Agreement (TEPA) is a landmark trade deal between India and the European Free Trade Association (EFTA), comprising Switzerland, Norway, Iceland, and Liechtenstein. Unlike traditional Free Trade Agreements (FTAs) that focus solely on tariff reductions, TEPA introduces a legally binding investment chapter. Under this pact, EFTA nations have committed to investing $100 billion in India over 15 years, aiming to generate one million direct jobs. The arc tracks the final procedural steps in 2025—from Switzerland's formal ratification in July to the agreement officially entering into force in October—marking a new era where India leverages its market size for guaranteed capital inflows.

How This Story Evolved

Switzerland's ratification of the TEPA (July 14) → Formal announcement of the October 1st enforcement date and investment targets (August 4) → The agreement officially entering into force (October 1).

1. 2025-07-14: India's Free Trade Agreements: Updates in 2025
   More details

   UPSC Angle: Switzerland ratified Trade and Economic Partnership Agreement (TEPA) with India.

   Key Facts:

   • Switzerland formally ratified the Trade and Economic Partnership Agreement (TEPA) with India
   • India–UK FTA was officially signed and formalised on July 24, 2025
   • The trade pact finalized on May 6, 2025, is projected to enhance bilateral trade between the two countries by an estimated US$34 billion annually
2. 2025-08-04: India-EFTA Trade Agreement
   More details

   UPSC Angle: India-EFTA TEPA comes into force; EFTA to invest USD 100 billion.

   Key Facts:

   • TEPA comes into force on 1st October 2025
   • EFTA will invest USD 100 billion in India over 15 years
   • Aims to create 1 million jobs
3. 2025-10-01: India-EFTA Trade and Economic Partnership Agreement (TEPA) in Effect
   More details

   UPSC Angle: India-EFTA TEPA came into effect on October 1, 2025.

   Key Facts:

   • TEPA came into effect on October 1, 2025.
   • Signed in March 2024 in New Delhi.
   • EFTA members include four developed European nations.
   • The agreement includes a commitment linked to investment and job creation.
   • EFTA has committed to $100 billion in investments and the creation of 1 million direct jobs in India within 15 years.
   • EFTA offers zero-duty access on 92.2% of tariff lines, covering 99.6% of India's exports.
   • The agreement covers 100+ sub-sectors in services, including IT, education, audio-visual, and business services.
   • It includes Mutual Recognition Agreements (MRAs) in nursing, architecture, and chartered accountancy.
   • The agreement incorporates TRIPS+ standards with safeguards for generic medicines.
   • Agreement: Trade and Economic Partnership Agreement (TEPA)
   • Parties: India and European Free Trade Association (EFTA)
   • Effective Date: October 1, 2025
   • Signing Date: March 10, 2024
   • Investment Commitment: US$100 billion over 15 years
   • EFTA Countries: Switzerland, Norway, Iceland, and Liechtenstein
   • The trade agreement will come into force within the initial months of 2026.
   • FTA Negotiations: United States, European Union, New Zealand, Oman, Peru, and Chile
   • EFTA TEPA Effective Date: October 1, 2025
   • EAEU Agreement: Terms of Reference (ToR) agreed in August 2025
   • EAEU Members: Armenia, Belarus, Kazakhstan, Kyrgyz Republic, and Russia
   • India and America reaffirm that they would aim to reach a Bilateral Trade Agreement (BTA)
   • The agreement seeks to go beyond bilateral trade from a current USD 191 billion to USD 500 billion by 2030.

Genesis

Trigger

The agreement was formally signed on March 10, 2024, in New Delhi, after nearly 16 years of intermittent negotiations that began in 2008.

Why Now

India is pivoting from 'Look East' to 'Global West' to diversify supply chains and attract high-tech manufacturing. The EFTA countries, particularly Switzerland, seek to reduce their dependence on the EU and China by tapping into India's growing middle class.

Historical Context

Previously, India’s FTAs (like those with ASEAN, Japan, and Korea) were criticized for increasing trade deficits without significant investment gains. TEPA was designed specifically to rectify this by including an 'Investment Promotion and Development' chapter.

Key Turning Points

1. [2025-07-14] Switzerland ratifies the TEPA

   As the largest economy in EFTA, Swiss ratification was the 'go-ahead' signal for the entire bloc.

   Before: The agreement was signed but dormant. After: A definitive timeline for enforcement was established.

2. [2025-10-01] TEPA enters into force

   Triggers the start of the 15-year window for the $100 billion investment commitment.

   Before: Diplomatic intent. After: Legally enforceable trade and investment obligations.

Key Actors and Institutions

Key Institutions

• European Free Trade Association (EFTA)
• Department of Commerce (India)
• World Trade Organization (WTO)

Key Concepts

Trade and Economic Partnership Agreement (TEPA)

A comprehensive trade pact that goes beyond goods and services to include investment, intellectual property, and government procurement.

Current Fact: TEPA officially entered into force on October 1, 2025.

EFTA (European Free Trade Association)

An intergovernmental organization of four European states (Iceland, Liechtenstein, Norway, Switzerland) that operates in parallel with the EU but is not part of it.

Current Fact: EFTA members have committed to $100 billion in investments in India over 15 years.

Ratification

The formal validation of a treaty by a state's domestic legislature, making it legally binding under international law.

Current Fact: Switzerland ratified the TEPA on July 14, 2025.

What Happens Next

Current Status

As of October 1, 2025, the TEPA is fully operational, with immediate tariff concessions on Swiss watches, chocolates, and machinery, and Indian textiles and chemicals.

Likely Next

Establishment of a joint monitoring committee to track the first tranche of the $100 billion investment; potential spike in Swiss banking and insurance firms expanding Indian operations.

Wildcards

Global economic slowdown affecting the EFTA's ability to meet investment targets; potential legal challenges in EFTA countries regarding India's labor or environmental standards.

Why UPSC Cares

Syllabus Topics

• Bilateral, regional and global groupings and agreements involving India
• Effects of liberalization on the economy
• Investment models

Essay Angles

• Economic Diplomacy: Leveraging market size for investment commitments.
• The shift from traditional FTAs to 'Investment-linked' trade agreements.

Prelims Likely: Yes

Mains Likely: Yes

Trend Signal: rising

Exam Intelligence

Previous Year Question Connections

• Identified the four member countries of EFTA. — Directly tests the foundational knowledge of who India is signing this agreement with (EFTA is not the EU).
• Asked about the Broad-based Trade and Investment Agreement (BTIA) with the EU. — Highlights India's strategy of signing agreements with European entities; TEPA succeeded where BTIA has struggled.

Prelims Angles

• Membership of EFTA (Switzerland, Norway, Iceland, Liechtenstein - NOT England/UK).
• Specific investment target: $100 billion over 15 years.
• Job creation target: 1 million direct jobs.
• Status of TEPA: First Indian trade deal with a legally binding investment chapter.

Mains Preparation

Sample Question: The India-EFTA Trade and Economic Partnership Agreement (TEPA) marks a paradigm shift in India's trade policy by linking market access to investment commitments. Critically analyze how this model addresses the shortcomings of India's previous Free Trade Agreements.

Answer Structure: Intro (Define TEPA & EFTA) → Body 1 (Shortcomings of past FTAs like trade deficits & lack of FDI) → Body 2 (Specifics of TEPA’s $100bn investment/1m jobs clause) → Body 3 (Challenges: Ratification delays, implementation hurdles) → Conclusion (TEPA as a template for future deals with UK/EU).

Essay Topic: New Frontiers in Indian Economic Diplomacy: From Trade in Goods to Trade in Capital.

Textbook Connections

Key Takeaway

TEPA transforms India's trade strategy from simple tariff-cutting to 'Market Access for Investment,' securing $100 billion in capital and 1 million jobs.

All Events in This Story (3 items)

1. 2025-07-14 [International Relations] — India's Free Trade Agreements: Updates in 2025
   In 2025, India has been actively involved in free trade agreement (FTA) negotiations and implementations. Switzerland ratified the Trade and Economic Partnership Agreement (TEPA) with India. India and the UK officially signed and formalized the India–UK FTA on July 24, 2025.
   More details

   UPSC Angle: Switzerland ratified Trade and Economic Partnership Agreement (TEPA) with India.

   Key Facts:

   • Switzerland formally ratified the Trade and Economic Partnership Agreement (TEPA) with India
   • India–UK FTA was officially signed and formalised on July 24, 2025
   • The trade pact finalized on May 6, 2025, is projected to enhance bilateral trade between the two countries by an estimated US$34 billion annually
2. 2025-08-04 [Economy] — India-EFTA Trade Agreement
   The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) nations will come into force on 1st October 2025. EFTA will invest USD 100 billion in India over 15 years to create 1 million jobs.
   More details

   UPSC Angle: India-EFTA TEPA comes into force; EFTA to invest USD 100 billion.

   Key Facts:

   • TEPA comes into force on 1st October 2025
   • EFTA will invest USD 100 billion in India over 15 years
   • Aims to create 1 million jobs
3. 2025-10-01 [International Relations] — India-EFTA Trade and Economic Partnership Agreement (TEPA) in Effect
   The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) came into effect on October 1, 2025. Signed in March 2024 in New Delhi, TEPA is a comprehensive FTA between India and EFTA, marking India's first such agreement linking trade, investment, and job creation commitments. The agreement aims to boost economic ties by promoting investment and creating jobs.
   More details

   UPSC Angle: India-EFTA TEPA came into effect on October 1, 2025.

   Key Facts:

   • TEPA came into effect on October 1, 2025.
   • Signed in March 2024 in New Delhi.
   • EFTA members include four developed European nations.
   • The agreement includes a commitment linked to investment and job creation.
   • EFTA has committed to $100 billion in investments and the creation of 1 million direct jobs in India within 15 years.
   • EFTA offers zero-duty access on 92.2% of tariff lines, covering 99.6% of India's exports.
   • The agreement covers 100+ sub-sectors in services, including IT, education, audio-visual, and business services.
   • It includes Mutual Recognition Agreements (MRAs) in nursing, architecture, and chartered accountancy.
   • The agreement incorporates TRIPS+ standards with safeguards for generic medicines.
   • Agreement: Trade and Economic Partnership Agreement (TEPA)
   • Parties: India and European Free Trade Association (EFTA)
   • Effective Date: October 1, 2025
   • Signing Date: March 10, 2024
   • Investment Commitment: US$100 billion over 15 years
   • EFTA Countries: Switzerland, Norway, Iceland, and Liechtenstein
   • The trade agreement will come into force within the initial months of 2026.
   • FTA Negotiations: United States, European Union, New Zealand, Oman, Peru, and Chile
   • EFTA TEPA Effective Date: October 1, 2025
   • EAEU Agreement: Terms of Reference (ToR) agreed in August 2025
   • EAEU Members: Armenia, Belarus, Kazakhstan, Kyrgyz Republic, and Russia
   • India and America reaffirm that they would aim to reach a Bilateral Trade Agreement (BTA)
   • The agreement seeks to go beyond bilateral trade from a current USD 191 billion to USD 500 billion by 2030.