Context

• The Trade and Economic Partnership Agreement (TEPA) between India and the four European Free Trade Association (EFTA) states, Iceland, Liechtenstein, Norway and Switzerland, entered into force on October 1, 2025.
• Its significance extends beyond tariff concessions to investment, employment, technology transfer and sustainable development.
• TEPA reflects India’s evolving trade strategy, in which trade agreements increasingly serve as platforms for building long-term economic and technological partnerships.

Lasting Partnerships, an India Focus

• TEPA provides substantial market access. EFTA has offered concessions on 92.2% of tariff lines, covering 99.6% of the value of Indian exports, while India has offered concessions on 82.7% of tariff lines, covering 95.3% of EFTA exports.
• More importantly, TEPA is India’s first trade agreement with a dedicated emphasis on investment and job creation.
• EFTA states aim to facilitate $100 billion of investment in India over 15 years and contribute to the creation of one million direct jobs.
• This gives the agreement a long-term developmental dimension.
• Iceland’s importance within this framework comes not from economic scale but from its specialised expertise in geothermal energy, carbon management and fisheries.

Geothermal Energy and Energy Security

• Iceland has decades of experience in the direct use of geothermal energy for heating, agriculture and food processing.
• This expertise is particularly relevant to India’s Himalayan geothermal belt.
• At Tapri in Himachal Pradesh, an Indian-Icelandic venture uses geothermal heat to dry fruit, helping apple growers process and store their produce rather than selling immediately during the harvest glut.
• Geothermal cooling can further strengthen agricultural value chains.
• The technology also has strategic relevance for remote Himalayan communities and frontier installations that depend on fuel transported through difficult mountain routes.
• Locally available geothermal energy could improve energy security and reduce dependence on vulnerable supply chains.

Carbon Capture, Utilisation and Storage (CCUS)

• The second major area is CCUS, particularly important for reducing emissions from hard-to-abate industries such as steel, cement, refining, chemicals and power.
• NITI Aayog has estimated that India could potentially capture around 750 million tonnes of carbon dioxide annually by 2050.
• The Department of Science and Technology has developed a CCUS research roadmap, while the Union Budget has allocated ₹20,000 crore over five years to help scale the technology.
• Iceland’s CarbFix technology provides valuable experience in geological carbon storage by dissolving carbon dioxide in water and injecting it into basalt, where it mineralises into rock.
• India’s extensive Deccan Trap basalt formations offer scope for similar applications.
• Iceland also possesses experience in carbon utilisation, including the conversion of captured carbon dioxide into methanol.

New Frontiers

• Fisheries and the Blue Economy
  • Iceland has developed expertise in seafood quality, cold-chain logistics and value-added processing.
  • A particularly relevant lesson is maximum utilisation of marine resources.
  • Iceland reportedly uses around 90% of each cod landed, converting skin, liver and bones into medical products, oils and feed.
  • India can increase value addition, employment and exports by making better use of existing catches rather than depending solely on higher fishing volumes.
  • Technology transfer and seafood processing under TEPA can strengthen coastal industries and generate additional economic opportunities.
• Technology Transfer and Industrial Cooperation
  • Cooperation can include technology licensing, feasibility studies, storage assessment, monitoring and verification, research and commercial-scale project development.
  • Such collaboration can help India move promising technologies from the pilot stage to commercial deployment, strengthening domestic technological capabilities.
• Energy, Trade and Arctic Cooperation
  • Iceland is a founding member of the Arctic Council, while India has been an Observer since 2013 and adopted its Arctic Policy in 2022.
  • India also operates the Himadri research station in Svalbard.
  • Iceland can therefore provide India with an important bilateral channel for cooperation in Arctic governance, scientific research and environmental stewardship.
  • The convergence of trade, energy and Arctic cooperation demonstrates that modern economic partnerships increasingly involve technology, sustainability, scientific research and strategic cooperation.

Challenges and the Way Forward

• Investment commitments must translate into actual projects, employment and technological capabilities.
• Similarly, emerging technologies such as geothermal systems and CCUS require appropriate infrastructure, financing, regulatory frameworks and skilled manpower.
• India must therefore focus on technology absorption, domestic capacity-building and commercially viable projects.
• Cooperation should also encourage Indian firms and institutions to participate actively rather than remain passive recipients of foreign technology.

Conclusion

• TEPA represents a shift from conventional trade liberalisation towards a partnership based on investment, technology, employment and sustainability.
• India contributes its large market, industrial capacity and development opportunities, while Iceland brings specialised expertise in geothermal energy, carbon management and fisheries.
• Its broader significance lies in demonstrating that countries of very different sizes can combine complementary capabilities to address common economic and environmental challenges.
• TEPA can thus serve as a practical model for how India’s engagement with Europe can move beyond tariffs towards innovation, sustainable development, value addition and long-term strategic cooperation.