India-EFTA free trade deal kicks off opening European markets for Indian exports

The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) between India and the four EFTA countries — Iceland, Liechtenstein, Norway, and Switzerland—became effective on Oct 1.

The agreement, originally signed in March 2024, will reduce tariffs on many goods, making Swiss wines, chocolates, watches, and apparel cheaper in India while opening up markets for Indian exports in high-income European nations.

Under the pact, India’s offer covers 82.7% of tariff lines representing 95.3% of EFTA exports. In return, EFTA has offered tariff reductions on 92.2% of Indian tariff lines, covering 99.6% of India’s export profile.

Sensitive sectors such as pharmaceuticals, processed food, dairy, and certain agricultural products have been excluded from the cover so far, along with sectors like medical devices and coal.

Some immediate tariff eliminations are already in force for items such as coal (except for steam-and coking coal), most medicines, dyes, apparel, and iron & steel goods.

Products like smartphones, cod liver oil, and fish body oil will see duties drop to zero over a five-year period, while others—including chocolate, watches, tuna, salmon, and olive oil — will have their duties phased out over seven to ten years.

Indian exporters of labor-intensive sectors such as textiles, marine products, leather, sports goods, toys, gems & jewellery, tea, coffee, and fresh fruits are expected to benefit significantly as barrier reductions take effect and market access widens.

Additionally, engineering goods, electronics, chemicals, and plastic products are among other Indian sectors set to gain from lower duties.

According to India’s commerce ministry, the pact is not just about trade volumes — it is also designed to provide strategic advantages to India’s electronics sector and other high-value manufacturing domains by facilitating access to high-income European markets.

However, sectors designated as sensitive remain protected by maintaining duties or by longer phase-outs, safeguarding domestic producers for now.

Market analysts suggest consumers in India should start seeing price reductions in imported Swiss goods like wines, chocolates, and watches relatively soon, subject to supply chain and distribution adjustments.

Export firms in India are preparing to respond to the opportunity, including aligning with EFTA standards and improving competitiveness.

For several Indian industries, this trade pact marks a key expansion opportunity into developed European economies where tariffs have long posed a barrier.

The agreement reflects India’s broader ambition to diversify export markets and reduce trade imbalance with high-income blocs.