INDIA-EFTA deal October 1: $100 billion boost, Swiss goods at lower or zero duties

MUMBAI/NEW DELHI: The free trade agreement between India and the four-nation European bloc EFTA will be implemented from October 1, Commerce and Industry Minister Piyush Goyal announced on Saturday.

The two sides signed the Trade and Economic Partnership Agreement (TEPA) on March 10 last year.

Under the pact, India has received an investment commitment of USD 100 billion in 15 years from the grouping while allowing several products, such as Swiss watches, chocolates, and cut and polished diamonds, at lower or zero duties.

“India-EFTA TEPA to come into effect from 1st October,” Goyal said in a post on X.

The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.

The bloc has committed an investment of USD 100 billion -- USD 50 billion within 10 years after the implementation of the agreement and another USD 50 billion in the next five years -- which would facilitate the creation of 1 million direct jobs in India. This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far.

The commitment is the key substance of the agreement, which took almost 16 years to conclude, for India in return for opening its markets for several products coming from the EFTA nations.

The biggest trading partner of India in the bloc is Switzerland. India has low trade volumes with the remaining three countries.

In the pact, India is offering 82.7 per cent of its tariff lines or product categories, which cover 95.3 per cent of EFTA exports, of which more than 80 per cent of imports are gold.

Domestic customers will get access to high-quality Swiss products, such as watches, chocolates, biscuits, and clocks, at lower prices as India will phase out customs duties under the trade pact on these goods over 10 years.

In the services sector, the Commerce Ministry had earlier stated that India has offered 105 sub-sectors to the EFTA, like accounting, business services, computer services, distribution and health.

On the other hand, the country has secured commitments in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland.

Segments, where Indian services will get a boost, include legal, audio-visual, R&D, computer, accounting, and auditing. Further, the pact would provide an opportunity for domestic exporters to integrate into the EU (European Union) markets. Over 40 per cent of Switzerland’s global services exports are to the EU. Indian companies can look to Switzerland as a base for extending their market reach to the EU.

India-EFTA two-way trade was USD 24.4 billion in 2024-25. On the tariff negotiations with the US, Goyal said, “Our negotiations strategy hinges on national interest. At no point of time will the Narendra Modi government ever allow national interest to be compromised”.

In another significant development on the economic front, India and the US teams have concluded the fifth round of talks for the proposed bilateral trade agreement (BTA) in Washington on July 17, an official said.

The negotiations were held for four days (July 14-17) in Washington. “The Indian team is coming back,” the official said.

India’s chief negotiator and special secretary in the Department of Commerce Rajesh Agrawal led the team for negotiations. These deliberations are important as both sides are looking at finalising an interim trade deal before August 1, which marks the end of the suspension period of Trump tariffs imposed on dozens of countries, including India (26 per cent).

On April 2 this year, US President Donald Trump announced these high reciprocal tariffs. The implementation of high tariffs was immediately suspended for 90 days till July 9 and later until August 1, as America is negotiating trade deals with various countries.

Issues related to agriculture and automobiles are learnt to have figured during the fifth round of negotiations. Matters related to ways to deal with non-market economies, and SCOMET (Special Chemicals, Organisms, Materials, Equipment, and Technologies) also came up for discussion.

India has hardened its position on the US demand for duty concessions on agri and dairy products. New Delhi has, so far, not given any duty concessions to any of its trading partners in a free trade agreement in the dairy sector. Certain farmers’ associations have urged the government not to include any issues related to agriculture in the trade pact.

India is seeking the removal of this additional tariff (26 per cent). It is also seeking the easing of tariffs on steel and aluminium (50 per cent) and the auto sector (25 per cent).

These issues are an important part of the trade pact negotiations, the official said.

Against these, India has reserved its right under the WTO (World Trade Organization) norms to impose retaliatory duties. The country is also seeking duty concessions for labour-intensive sectors, such as textiles, gems and jewellery, leather goods, garments, plastics, chemicals, shrimp, oil seeds, grapes, and bananas, in the proposed trade pact.

On the other hand, the US wants duty concessions on certain industrial goods, automobiles, especially electric vehicles, wines, petrochemical products, agri goods, dairy items, apples, tree nuts, and genetically modified crops.India’s merchandise exports to the US rose 22.8 per cent to USD 25.51 billion in the April-June quarter of FY26, while imports rose 11.68 per cent to USD 12.86 billion.