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TEPA between India and EFTA states


 Syllabus: Economic Liberalization, Trade Agreement


Source: IE


Context: The Secretary General of the European Free Trade Association (EFTA) states that a Trade and Economic Partnership Agreement (TEPA) between India and EFTA will enhance the economic partnership


What is TEPA?

 A trade and Economic Partnership Agreement is a type of economic partnership agreement between countries. TEPA agreements offer flexibility in terms of negotiating terms and conditions, as the parties involved can tailor the agreement to their specific needs and interests.



About EFTA:

Topic Description
European Free Trade Association (est. 1960; HQ: Geneva) is an intergovernmental organization founded by four European countries: Iceland, Liechtenstein, Norway and Switzerland as an alternative to the EU.
Purpose To promote free trade and economic cooperation among its member states and with other countries
Relationship with EU EFTA has a close relationship with the EU and has signed several agreements, which allow for the free movement of goods, services, capital, and people between the EFTA countries and the EU
Strength of EFTA countries The economy of these countries is very strong. They rank among the highest in the world in innovation, competitiveness, wealth creation per inhabitant, life expectancy, and quality of life. EFTA companies are also world leaders in pharmaceuticals, biotechnology, machinery manufacturing, R&D-driven technology products, geothermal-related technologies and many more.



Potential Benefits of TEPA between India and EFTA States:

Area Benefits
Trade India’s growth and leadership in green technologies can benefit from EFTA’s support.
Market Access Improved market access for Indian goods to EFTA markets where EFTA’s export products frequently serve as inputs in Indian export industries.
Investment Increase in investment from EFTA states (They have already invested over USD 35 billion in India)
Mutual Benefits EFTA states can benefit from India’s highly skilled workforce in the services sector, and India can benefit from the over 400 companies established by EFTA states generating more than 1,50,000 jobs.
Renewable Technologies EFTA states can contribute to India’s green growth aspirations with their cutting-edge technologies in solar, wind, hydro, and geothermal power.


Challenges in Implementing TEPA between India and EFTA Countries:

Challenge Description
Economic structure While EFTA countries (developed economies) focus on high-tech industries and services, India (developing economy) generally serves lower and middle-tech industries and services.
Market access E.g., issues regarding tariffs, quotas, and non-tariff barriers to ensure free and fair trade between the parties.
Regulatory Differences in regulations, standards, and legal frameworks
Securing domestic manufacturers Particularly in sectors such as pharmaceuticals, biotechnology, and machinery manufacturing, where EFTA countries have a competitive edge.
Environmental and social Addressing environmental and social challenges, such as promoting sustainable development and gender equality, is crucial in establishing a long-term, successful partnership between the parties.
Negotiation Negotiating a mutually beneficial agreement that meets the interests of all parties involved can be challenging.




To ensure the conclusion of a mutually beneficial TEPA between India and EFTA, outstanding issues should be addressed, areas of mutual benefit identified, and collaboration on skilled labour promoted. Strong political involvement and guidance are necessary for a swift negotiation process.


Mains Links:


  1. What is a free trade agreement (FTA)? How are FTAs important for India? What are the various issues that are involved in FTA negotiation? How can the issues be resolved? (250 Words)


Prelims Links:

Consider the following countries: (2018)

  1. Australia
  2. Canada
  3. China
  4. India
  5. Japan
  6. USA


Which of the above are among the ‘free-trade partners’ of ASEAN?

(a) 1, 2, 4 and 5
(b) 3, 4, 5 and 6
(c) 1, 3, 4 and 5
(d) 2, 3, 4 and 6


Ans: C