India–EFTA Deal: Driving Investments from Europe to India

Introduction

India currently shares a dynamic relationship with countries across the globe. While some of India’s traditional trade routes have faced challenges, landmark trade agreements have been signed with the UK and now with the European Free Trade Association (EFTA) — Switzerland, Norway, Iceland, and Liechtenstein. For Indian businesses, traditional trading partners may be changing, but agreements like these have opened the door to new opportunities.

Under this agreement, the EFTA states have agreed to keep all industrial goods, fish, and marine products from India duty-free. At the same time, they are set to bring in large investments, with a commitment of USD 100 billion over the next 15 years and the creation of one million direct jobs in India.

For India, this is not just another trade agreement. It is a chance to access some of the most developed markets in Europe without trade barriers, attract foreign investment, build strategic global collaborations, and expand businesses with access to innovation and advanced technology.

The uniqueness of this EFTA agreement is that it is not just about exports, but about helping India gain a stronger position as a partner in the global value chain.

The $100 Billion Investment Promise

What sets this agreement apart from other FTAs that India has signed is that, instead of focusing mainly on the trade of goods and services, it emphasizes bringing foreign direct investment (FDI) into the Indian economy. The four EFTA countries have committed to invest USD 100 billion into India over the next 15 years. This will happen in two phases:

• USD 50 billion in the first 10 years, and
• Another USD 50 billion in the next 5 years.

Along with the investment, the EFTA countries has also committed to help create 1 million direct jobs in India majorly through establishing new projects, joint ventures and strategic collaborations across the sectors like technology, cleantech energy, healthcare and manufacturing.

There are two major things for the Indian businesses:

• Access to more capital for establishing projects and partnerships
• Stronger partnerships with European companies to gain access to advanced technologies, new skills and market access to global markets.

To ensure that these things are translated to reality, a committee has been established to review the mechanisms and track the progress at regular intervals. This will ensure that the commitment is being fulfilled and if not, then India will have the right to take corrective steps.

What Indian Businesses Need to Know About EFTA

The EFTA agreement offers huge number of opportunities for the Indian companies but to get the most out of it, it is important to understand each country who India is partnering with, under this agreement. The European Free Trade Association (EFTA) is made up of four countries which are Switzerland, Norway, Iceland and Liechtenstein.

• Switzerland is one of the world's leading financial hubs and a centre for innovation, pharmaceuticals, engineering and luxury goods.
• Norway is rich in natural resources and a leader in clean energy, logistics and sustainable practices.
• Iceland is known for its specialisation in renewable energy, majorly geothermal power as well as fisheries and marine technologies.
• Liechtenstein is a country with small population but strong in various industries such as manufacturing, financial services and high – end machinery.

Though these countries are small in population, but they are amongst the richest and most advanced in the global economies. For Indian businesses it translates to:

• High purchasing power markets in Europe
• Advanced technology and research capabilities
• Access to strong capital inflows through FDIs and strategic collaborations.

To gain the maximum out of this agreement it is important to analyse and understand the strength of each of the respective country in the agreement and accordingly develop a strategy to align your business proposals with their interests.

Sectors Set to Benefit the Most

The India – EFTA agreement is a well defined and structured document which doesn’t limit itself to reducing tariffs or encouraging investment but also points to specific sectors where collaboration is set to grow. Indian businesses should monitor and watch the following sectors closely:

• Healthcare and Biotechnology: Switzerland is home to some of the world’s biggest and most advanced pharmaceutical and life sciences companies. Indian firms can benefit through joint research, technology licensing, and co-development of new drugs, medical devices, and digital health solutions.
• Renewable Energy and Clean Technologies: Norway and Iceland specialize in clean energy, including hydropower, wind, and geothermal energy. This opens opportunities for Indian firms in solar, wind and the growing green hydrogen sector.
• Digital Technologies and Innovation: Countries that are a part of the EFTA are world leaders in advanced manufacturing, robotics, and IT sector. Indian start-ups and IT companies has an opportunity to partner with them to develop digital platforms, artificial intelligence tools, and automation systems.
• Sustainable Metals and Manufacturing: Collaboration is possible in areas like green steel, precision engineering, and high-quality machinery. Indian manufacturers can learn and adopt from European practices to improve efficiency and reduce emissions.
• Food Processing and Marine Products: With duties removed on Indian fish and marine exports, Indian companies in this sector can rapidly expand their footprint in European markets.

Potential collaboration of India companies with European companies in these sectors will give them the opportunity to modernize with advanced technology and understand the know-how from Europe.

How Indian Businesses Can Prepare and Position Themselves

As India shifts from traditional trade partners like the US and China to new FTAs with the UK, Europe, and Australia, the EFTA agreement which will be effective from 1st October 2025 is a major opportunity for Indian businesses to prepare early and position themselves as the potential partners to the European companies instead of waiting passively for the investment.

Below mentioned are some steps to help the Indian businesses get ready:

1. Map Your Business to EFTA’s Strengths
It is important to understand that European investors want a clear entry route, therefore it is important to analyse the strength of each country which are the part of the EFTA and accordingly match your product or service to their gaps in India.

2. Create Investor-Friendly Packages
While pitching your business for investment, it is important to understand getting access to capital can’t be the ultimate goal to attract the European investors. Instead, the thought process should be of what can the Indian business offer to them such as:

• Equity and a Technology tie-up
• Market access and industrial capabilities
• Export potential and green transition

The major ways through which the investment will flow will be ideally through Joint Ventures, Technology Licensing, collaboration through centres of excellence, skills and training.

3. Be Visible in the Right Arenas
The government and EFTA partners will run roadshows, roundtables, and global investment forums. These events are going to be the deal-making hotspots. It is important to prepare crisp decks and case studies to stand out.

4. Compliant with the laws and regulations
Prior to making any investments and collaboration, a detailed due diligence will be conducted by the European investors and will ultimately invest into the companies that are audit-clean, governance-strong, and compliance-ready.

5. Pitch the impact rather than business
While an important part of the deal is to drive in the FDI to India but also an important aspect is to generate 1 million direct jobs. It would be an ideal scenario to frame your business in how many jobs and skills your growth will generate along with other positive impacts.

Role of the EFTA Desk and Government Support

To make sure Indian companies benefit fully from this agreement and ensure the promises are transitioned to reality, the government has planned support systems under the deal. One of the key initiatives is the creation of a dedicated EFTA Desk in India.

This role of the desk will be:

• Act as a single point of contact for investors from Switzerland, Norway, Iceland, and Liechtenstein.
• To help Indian businesses connect with the right potential partners and investors from EFTA countries.
• Provide guidance on regulations, approvals, updates and procedures so that projects move smoothly.
• Organize material shows such as roadshows, business meetings, and events to bring Indian and EFTA companies together.

The Indian businesses don’t have to navigate the process alone. With proper government support and a clear platform to engage with EFTA investors, businesses can save time, reduce risks, and increase their chances of securing deals.

Conclusion

The India–EFTA agreement opens the door to new opportunities for Indian businesses by ensuring easier access to European markets, attracting large FDI investments, and creating direct jobs. It is important for Indian companies to prepare early, align with global standards, and position themselves as reliable partners.

With over two decades of global experience, especially with extensive work in Europe, we at ILO Consulting specialize in helping international companies enter the Indian market through cross-border M&A, joint ventures, technology licensing, and other strategic collaborations.

Partner with us to unlock the full potential of the India–EFTA agreement.