India-EFTA Trade Agreement Success

Trade and Economic Partnership Agreement (TEPA) - India and EFTA

Overview

• Effective Date: October 1, 2025.
• Parties Involved: India and four European Free Trade Association (EFTA) states: Iceland, Liechtenstein, Norway, and Switzerland.
• Purpose: Strengthen trade relations and foster investment.

Key Terms of Agreement

• Tariff Concessions:
  • EFTA states: Concessions on 92.2% of tariff lines, covering 99.6% of India's exports.
  • India: Concessions on 82.7% of tariff lines, covering 95.3% of EFTA's exports.

Investment and Job Creation Targets

• Investment Target: $100 billion from EFTA states in India over 15 years.
• Job Creation Aim: Facilitate one million direct jobs.

Areas of Focus and Cooperation

1. Geothermal Energy:

   • Direct Use: Experience from Iceland in using low- to medium-temperature geothermal energy, such as heating homes and agricultural processes, to be adapted in India.
   • Example Project: Geothermal facility in Kinnaur district, Himachal Pradesh, enabling farmers to dry fruit, improving storage and sales timing.

2. Carbon Capture, Utilisation and Storage (CCUS):

   • Potential: NITI Aayog study (2022) estimates India could capture 750 million tonnes of CO2 annually by 2050.
   • Government Support: ₹20,000 crore allocated in Union Budget for CCUS technology development over five years.
   • International Collaboration: Projects with Iceland involve knowledge sharing and technology licensing for e-methanol production at JSW Steel in Maharashtra.

3. Sustainable Fisheries Management:

   • Learning from Iceland: Expertise in maximizing use of fish resources (up to 90% utilization) to enhance value in Indian fisheries without increased catch.
   • Potential Collaboration: Icelandic companies exploring processing North Atlantic fish catches in India.

International Relations Framework

• Arctic Engagement:
  • Iceland: Founding member of the Arctic Council.
  • India: Observer since 2013; published its Arctic Policy in 2022.
  • Collaboration focused on energy, trade, and shared stewardship of the Arctic region.

Conclusion

• The TEPA serves as a forward-looking model of Europe-India trade partnerships, complementing ongoing discussions such as the EU-India Free Trade Agreement (FTA). It aims to enhance investment, technology transfer, and develop a mutual framework for sustainability and job creation.

Economic Data & Indicators

• Investment Objectives: $100 billion investment, 1 million jobs.
• Budget Allocation: ₹20,000 crore for CCUS development.

Constitutional and Policy References

• Emphasis on economic development aligns with the Directive Principles of State Policy (DPSP) aimed at ensuring economic growth and job creation in the Constitution of India.

Environmental and Technological Implications

• Focus on sustainable practices in energy and fisheries to align with global environmental goals.
• Long-term technological collaborations expected to enhance capabilities in carbon management and energy security.