[Answered] The EFTA trade pact reinforces India’s image as a trusted partner. Examine how such agreements are crucial for promoting Atmanirbhar Bharat and Make in India in the evolving global economic order.”

Introduction

India’s first comprehensive trade agreement with developed European economies, the 2025 India-EFTA TEPA, pledging $100 billion investment and one million jobs, exemplifies how strategic trade pacts complement Atmanirbhar Bharat and Make in India.

Strategic Significance of the India-EFTA Pact

1. Unprecedented Investment Commitment: $100 billion over 15 years and one million direct jobs—the largest such FTA-linked pledge.
2. Enhanced Market Access: Tariff elimination on 92.2% of tariff lines, covering 99.6% of India’s exports by value.
3. Services Boost: Commitments in over 120 sub-sectors per partner nation support India’s IT, skilled labour, and business services exports.

Linkages with Atmanirbhar Bharat and Make in India

1. Technology Transfer and Innovation: Access to EFTA expertise in precision engineering, renewable energy, and frontier technologies aligns with self-reliance through capacity-building.
2. Domestic Manufacturing Push: Greater export competitiveness in textiles, pharmaceuticals, and gems and jewellery enhances Make in India’s global value chain integration.
3. Job Creation: Supports India’s demographic dividend by fueling manufacturing and services-led employment.

Energy Security and Green Transition

1. Renewables Partnership: Helps achieve 500 GW renewable energy target by 2030 and Net Zero by 2070.
2. Nuclear Synergy: India’s thorium reserves (~25% of world total) can benefit from Norway’s thorium research ecosystem and EU green finance taxonomy.
3. Climate Diplomacy: Aligns with India’s Nationally Determined Contributions (NDCs) under the Paris Agreement, ensuring growth with sustainability.

Geoeconomic and Diplomatic Dimensions

1. Diversification of Trade Partners: Reduces over-dependence on China and creates resilience against supply chain disruptions.
2. Global South Leadership: Positions India as a rule-shaper rather than a rule-taker in global trade governance.
3. Confidence in Indian Reforms: TEPA validates India’s stable investment climate, echoing the IMF’s 2024 recognition of India as the “world’s fastest-growing large economy.”

Challenges and Caution

1. Domestic Industry Concerns: Risk of import surges in sensitive sectors like dairy and pharmaceuticals.
2. Implementation Bottlenecks: Ensuring ease of doing business, quick dispute resolution, and infrastructure upgradation is critical.
3. Global Trade Fragmentation: Rise of protectionism and “friend-shoring” may test long-term sustainability of FTAs.

Way Forward

1. Leverage FTA Template: TEPA should serve as a model for future pacts with the UK, EU, and GCC.
2. Boost R&D and Skill Development: Linking foreign investment to domestic innovation ecosystems.
3. Inclusive Growth: Ensure benefits reach MSMEs, which constitute 30% of GDP and 48% of exports.

Conclusion

As it has been well established power lies in interdependence. The EFTA pact exemplifies India’s strategic economic diplomacy, aligning global partnerships with Atmanirbhar Bharat’s vision of resilience, innovation, and inclusive development.