India-EFTA Trade Pact Could Attract $100 Billion Investment, Generate 2 Million Jobs by 2040

The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA) could attract up to $100 billion in investment and generate between one million and two million direct and indirect jobs in India by 2040, according to industry body ASSOCHAM.

Marking the completion of the agreement's first year, the Associated Chambers of Commerce and Industry of India said TEPA was gradually evolving beyond a conventional trade arrangement into a platform for investment, industrial development, innovation and employment generation.

The agreement involves EFTA members Switzerland, Norway, Iceland and Liechtenstein, which have committed to facilitating $100 billion in investment in India over 15 years, including $50 billion during the first decade.

ASSOCHAM said the priority now was to translate these commitments into actual projects, manufacturing facilities, clean-energy ventures and employment opportunities. Advanced manufacturing and green hydrogen are expected to play a significant role in the next phase of cooperation.

“The next step is to translate TEPA’s ambition of $100 billion in investment and one million direct jobs into viable projects and employment opportunities,” said Nirmal K. Minda, President of ASSOCHAM.

He added that advanced manufacturing and green hydrogen offered considerable potential, while micro, small and medium enterprises (MSMEs) needed to be integrated into the emerging partnerships.

The agreement has also expanded market-access opportunities for Indian exporters. According to ASSOCHAM, EFTA has offered tariff concessions on 92.2 per cent of its tariff lines, covering 99.6 per cent of India's exports.

Pharmaceuticals, textiles, engineering goods, chemicals, jewellery, processed foods and marine products are among the sectors expected to benefit from improved access to EFTA markets. At the same time, India's commitments under the agreement safeguard sensitive sectors, including dairy, soya and coal.

Bilateral trade between India and EFTA has reached $26.7 billion, providing a foundation for further expansion. ASSOCHAM noted that EFTA's annual imports from across the world, valued at approximately $628 billion, represented a substantial opportunity for Indian businesses seeking to expand their international presence.

“India’s 8.9 per cent share of its organic chemicals imports shows what is possible, and this can be replicated in pharmaceuticals, machinery, electrical equipment, automobiles, medical devices and textiles,” said Saurabh Sanyal, Secretary General of ASSOCHAM.

The benefits could extend across regions and business categories. Maharashtra, Karnataka, Kerala and northeastern states could gain from increased exports of agricultural products, seafood, coffee and spices. Large manufacturers, MSMEs, start-ups and farmers could also find new opportunities through stronger commercial ties with EFTA countries.

Green hydrogen has emerged as another potential area of cooperation. India's target of producing at least five million tonnes of green hydrogen annually by 2030 could complement Norway's maritime technology, Iceland's geothermal expertise and Switzerland's capabilities in electrolyser technology, ASSOCHAM said.

Artificial intelligence, robotics and advanced manufacturing are also promising areas for collaboration. India's production-linked incentive (PLI) schemes, Semicon India 2.0 and the IndiaAI Mission could provide a foundation for partnerships with EFTA companies specialising in precision engineering, automation and advanced industrial technologies.

However, converting the agreement's investment commitments into tangible economic gains will depend on the implementation of projects, the participation of domestic businesses and the creation of sustainable employment opportunities.

ASSOCHAM said effective collaboration between Indian industry and EFTA partners could help strengthen manufacturing competitiveness, diversify exports and support India's long-term economic growth.

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