- Why in news
- On 7 October 2026, the 2nd India-EFTA Prosperity Summit in New Delhi marked one year of the India-EFTA TEPA, which came into force on 1 October 2025.
- What it is
- The India-EFTA Trade and Economic Partnership Agreement (TEPA) is a free trade pact between India and the four EFTA states: Switzerland, Norway, Iceland and Liechtenstein. It covers goods, services, investment, intellectual property, government procurement and sustainable development. Its distinctive feature is a binding-in-spirit investment target for EFTA states in India, stated as an aim.
- Entry into force
- TEPA took effect on 1 October 2025; the 7 October 2026 summit marked its first anniversary.
- Investment commitment
- Under Article 7.1, EFTA states aim to raise FDI into India by USD 100 billion over 15 years, and to facilitate one million jobs.
- EFTA market access
- EFTA covers 92.2% of its tariff lines, which account for 99.6% of India's exports, with full coverage of non-agricultural products.
- India's market access
- India's commitments cover 82.7% of tariff lines, accounting for 95.3% of EFTA exports.
- EFTA membership
- EFTA has four members: Switzerland, Norway, Iceland and Liechtenstein. It is not part of the European Union.
- Investment phasing
- USD 50 billion within ten years of entry into force and a further USD 50 billion over the next five years.
- Migration MoU aim
- The MoU builds migration and mobility cooperation on equal treatment and aims to fight irregular migration, exploitation and trafficking.
- Visa and student permits
- Multiple-entry visas up to 5 years, with stays up to 6 months per visit, and renewable 1-year student permits.
- Young Professionals exchange
- 300 persons a year per country, which can rise to 500, with 30/90-day timelines for verifying nationality or residency.
- Transport MoU
- The MoU between Switzerland's EAER and India's Ministry of Road Transport & Highways covers electric vehicles, ropeways, circular economy and tunnels.
- AIT India programme
- DST and Zurich University of Applied Sciences will run the Indo-Swiss Academia-Industry Training (AIT India) programme for early-stage startups.
- EFTA members
- EFTA has four members: Iceland, Liechtenstein, Norway and Switzerland. It is not part of the EU.
Don’t confuse with EFTA vs EU: EFTA is a separate free trade bloc of four non-EU states. The EU is a political and economic union with a customs union.
Don’t confuse with TEPA vs a standard FTA: TEPA is an FTA that also carries an investment aim and jobs target, which most Indian FTAs lack.
Don’t confuse with MoU vs treaty: An MoU is a non-binding understanding; it is not a treaty with legal force.
International bodies and relations: the largest group of news questions in Prelims (61 since 2013), often about background, members and location. In Mains, 27 news-triggered questions, mostly on India's interests.
Why it matters
- Gives Indian goods near-full tariff-free access to high-income European markets.
- The USD 100 billion FDI aim and one million jobs target support manufacturing and employment.
- Eases legal mobility of Indian students and professionals and curbs irregular migration and trafficking.
- Supports the EFTA TEPA by linking trade with people movement and technology cooperation.
- Builds science, startup and transport technology ties with a high-technology economy.
Problems
- The FDI figure is an aim, not a binding obligation, so delivery depends on private firms.
- Non-tariff measures and quality standards in EFTA markets can limit Indian exporters.
- Quotas such as 300 a year are small compared with the scale of Indian demand.
- Recognition of qualifications and Swiss domestic politics on migration limit the scope.
- Verification and return of irregular migrants can strain bilateral trust.
Way forward
- Prepare five-year action plans with each partner country and address non-tariff issues.
- Help MSMEs use TEPA through awareness drives by export councils and states.
- Raise quotas toward 500 and beyond once the pilot works.
- Agree on mutual recognition of skills and degrees.
- Monitor implementation through a joint working group and protect migrant workers' rights.
Put in your answer
Investment aim: Article 7.1: USD 100 billion FDI and one million jobs over 15 years.
Young Professionals scheme: 300 persons a year per country, expandable to 500, for temporary employment.
MMP visa terms: Five-year multiple-entry visas and renewable 1-year student permits.
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UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
Prelims practice · Single answer
Ours, not from a UPSC paper
Consider the following statements about the India-EFTA Trade and Economic Partnership Agreement (TEPA):
Which one of the following is correct?
True or false?
1 of 14
Statements the way Prelims prints them. Say first, then see the fact.
1.The European Free Trade Association consists of Switzerland, Norway, Iceland and Liechtenstein.
True. EFTA has these four members.
2.The India-EFTA TEPA entered into force on 1 October 2025.
True. TEPA entered into force on 1 October 2025.
3.Under TEPA, the EFTA states aim to raise FDI into India by USD 100 billion over 15 years.
True. The aim is USD 100 billion over 15 years, with one million jobs.
4.The investment target in TEPA is to be reached within five years of entry into force.
False. USD 50 billion in ten years, and another USD 50 billion over the next five years.
5.EFTA's tariff commitments under TEPA cover 92.2% of its tariff lines, which account for 99.6% of India's exports.
True. EFTA: 92.2% of tariff lines, 99.6% of India's exports.
6.India's tariff commitments under TEPA cover a larger share of tariff lines than EFTA's.
False. India covers 82.7% of tariff lines, lower than EFTA's 92.2%.
7.EFTA is an organisation of European Union member states that have adopted a common external tariff.
False. EFTA is a free trade bloc of non-EU states; it has no common external tariff or customs union.
8.The Migration and Mobility Partnership MoU provides for multiple-entry visas of up to 5 years.
True. Multiple-entry visas up to 5 years are provided.
9.The Young Professionals agreement provides for exchange of 300 persons annually per country, which may rise to 500.
True. 300 a year, expandable to 500.
10.The Young Professionals agreement covers permanent settlement of skilled workers in the other country.
False. It covers temporary employment to build professional and language skills.
11.The transport MoU was signed on the Indian side by the Ministry of Road Transport & Highways.
True. MoRTH is the Indian signatory, with Switzerland's EAER.
12.The Letter of Intent on research cooperation was signed between DST and the Swiss National Science Foundation.
True. DST and SNSF signed the LoI.
13.Switzerland is a member of the European Union and of EFTA.
False. Switzerland is in EFTA but not in the EU.
14.EFTA's members are Iceland, Liechtenstein, Norway and Switzerland.
True. These four states form EFTA.
Written by us from the release, not by UPSC; checked by a second model.
Mains practice
15 marks · 250 words
The India-EFTA Trade and Economic Partnership Agreement completed one year in October 2026. It carries an investment target of USD 100 billion over 15 years along with market access commitments. Examine the key provisions of the agreement and discuss the opportunities and challenges it presents for India's trade and investment.
Worth revising until Prelims 2028: most news questions come within two years of the event.