Source: The post Trade and Economic Partnership Agreement (TEPA) and its implication has been created, based on the article “The Global Stage on our Terms” published in “Indian Express” on 10 September 2025. Trade and Economic Partnership Agreement (TEPA) and its implication.
UPSC Syllabus Topic: GS Paper- 3- Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development and Employment.
Context: Recent signing of the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) comprising Switzerland, Norway, Iceland, and Liechtenstein is a landmark development. It marks India’s first comprehensive trade agreement with a group of advanced European economies, reflecting its ambition to transform into a globally integrated, self-reliant, and confident economy. The agreement has multiple economic, strategic, and diplomatic implications.
Economic Benefits:
- Market Access and Export Promotion: The agreement enhances market access for Indian goods and services by eliminating or reducing tariffs on 92.2% of tariff lines, representing 99.6% of India’s exports by value.
- It facilitates duty-free treatment for non-agricultural products such as organic chemicals, textiles, gems, jewellery, and industrial goods.
- Investment Commitments: The pledge to promote investment of about $100 billion over 15 years and facilitate up to 1 million direct jobs reflects a significant boost to India’s industrial and service sectors.
- Sub-sectoral Commitments: India has secured commitments across 128 sub-sectors from Switzerland, Norway, Iceland, and Liechtenstein, especially in information technology, business services, and skilled workforce domains.
- Competitive Consumer Market: Tariff cuts and duty-free access promise competitive prices and wider product choices for Indian consumers.
Strategic and Technological Collaboration:
- Access to Advanced Technologies: TEPA provides India with access to Europe’s advanced capabilities in precision engineering, pharmaceuticals, health sciences, renewable energy, and frontier technologies, aligned with India’s domestic needs.
- Thorium Energy Potential: With India holding nearly a quarter of the world’s thorium reserves, TEPA offers opportunities for collaboration in thorium fuel irradiation, research, and scaling up India’s nuclear energy program for clean and stable power generation.
- Support for Energy Transition: The EU’s Sustainable Finance Taxonomy enables India to tap into green transition funds, accelerating efforts toward achieving Net Zero emissions by 2070.
Diplomatic and Geopolitical Implications:
- Global Standing and Confidence: The agreement symbolizes India’s transition into a globally confident nation able to negotiate on equal footing with advanced economies, bolstering its image as a trusted and strategic partner.
- Atmanirbhar Bharat and Make in India Alignment: TEPA reinforces India’s vision of self-reliance by strategically integrating domestic manufacturing and innovation with global supply chains.
- Resilience and Diversification: In an era of geopolitical uncertainty and supply chain disruptions, TEPA helps diversify India’s economic partnerships, reducing over-reliance on any single bloc.
Challenges and Way Forward:
- Implementation and Capacity Building: Translating the agreement’s potential into tangible outcomes requires robust institutional mechanisms and capacity building for Indian businesses to adapt and scale advanced technologies.
- Equitable Growth: Ensuring the benefits reach all sections of society and do not further exacerbate economic inequalities is crucial.
- Ongoing Strategic Engagement: India should continue to negotiate and align with multilateral frameworks, ensuring that economic diplomacy supports long-term sustainable development and strategic autonomy.
Q. Analyze the significance of the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) in strengthening India’s global economic and strategic positioning.
