Context:

• India and the European Free Trade Association (EFTA) — comprising Switzerland, Norway, Iceland, and Liechtenstein — have signed the Trade and Economic Partnership Agreement (TEPA).
• This is India’s first comprehensive trade pact with developed European economies, marking a significant step in India’s global trade diplomacy.

Key Features of TEPA:

• Investment and job creation:
  • EFTA pledge: In an unprecedented commitment, the pledge is to promote investment of about $100 billion over 15 years in India and facilitate up to 1 million direct jobs.
  • Positions India as an attractive destination for long-term investment.
• Market access and tariff reductions:
  • EFTA countries have agreed to eliminate or reduce tariffs on 92.2% of tariff lines, representing 99.6% of India’s exports by value and to provide duty-free treatment for all non-agricultural products.
  • Boost to sectors: Textiles, gems and jewellery, organic chemicals, industrial goods.
  • Service sector gains: Commitments across 128 sub-sectors from Switzerland, 114 (Norway), 110 (Iceland), 107 (Liechtenstein).

Strategic and Technological Collaborations:

• Alignment with India’s priorities:
  • EFTA strengths: Precision engineering, pharmaceuticals, health sciences, renewable energy, frontier technologies.
  • Opportunities for India:
    • With its skilled talent pool, India can not only absorb these technologies but also adapt, scale, and innovate them to meet the demands of its domestic market and beyond.
    • This will support Atmanirbhar Bharat and Make in India
• Climate and energy transition:
• India’s goals: Net Zero by 2070 and 500 GW renewable capacity by 2030.
• TEPA opens doors for European green finance, technology partnerships, and capital for sustainability projects.
• Nuclear energy and thorium advantage:
  • India has achieved 50% of its installed electricity capacity from non-fossil fuel sources (Total - 243 GW, including 116 GW of solar, 52 GW of wind, and nearly 50 GW of hydro power).
  • Though this is 5 years ahead of the target (under NDCs to the Paris Agreement), the challenge remains of ensuring a stable baseload power source to complement the renewables which work intermittently.
  • This is where nuclear energy presents a compelling solution.
  • As India has approximately 25% of the world's thorium reserves, there is the potential to develop thorium-based nuclear energy, which is safe, clean, and proliferation-resistant.
  • TEPA may help access EU Sustainable Finance Taxonomy funds for thorium pilot projects.
  • Collaboration with Norway’s thorium research ecosystem could accelerate India’s three-stage nuclear programme.

Economic and Diplomatic Significance:

• Immediate benefits: Export promotion, services sector expansion, consumer choices.
• Long-term benefits: Energy security, technology transfers, resilience in supply chains.
• Strengthens: India’s position as a trusted global partner and services hub.
• Symbolises: India’s confident, assertive economic diplomacy aligned with Viksit Bharat 2047 vision.

Conclusion:

• TEPA is more than a trade deal. It is a strategic partnership framework combining trade, investment, technology, and sustainability.
• By leveraging European capital and expertise with India’s demographic and resource strengths, TEPA sets a new benchmark for global cooperation.
• It paves the way for an energy-secure, innovation-driven, and climate-resilient India, aligning domestic aspirations with global commitments