India-EFTA Trade and Economic Partnership Agreement (TEPA): A New Era in Trade Diplomacy
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India and the European Free Trade Association (EFTA) have initiated the ratification of the Trade and Economic Partnership Agreement (TEPA), promising $100 billion in investment. This landmark deal marks a strategic shift in India's trade policy, focusing on investment-linked market access with developed European nations.
India and the European Free Trade Association (EFTA)—comprising Iceland, Liechtenstein, Norway, and Switzerland—have officially moved toward the domestic ratification of the Trade and Economic Partnership Agreement (TEPA). Signed in March 2024, this agreement represents a watershed moment in India’s trade history, as it is the first time India has secured a legally binding commitment for investment and job creation in a Free Trade Agreement (FTA).
The cornerstone of TEPA is the commitment by EFTA nations to invest $100 billion in India over the next 15 years, aimed at generating one million direct jobs. This "investment-for-market-access" model addresses a long-standing criticism of India’s previous FTAs, where tariff reductions often led to widening trade deficits without corresponding gains in foreign direct investment (FDI). By targeting high-tech sectors such as pharmaceuticals, precision engineering, chemicals, and renewable energy, the deal aligns with the 'Make in India' and 'Viksit Bharat' objectives.
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