Evaluate whether target-based investment commitments in trade agreements can be effectively enforced.

The India–EFTA TEPA came into force on 1 October 2025 [1]. It is India's first FTA to link tariff concessions to an investment target. Under Article 7.1, the EFTA States "shall aim" to raise FDI into India by USD 100 bn over 15 years and to help create 1 million direct jobs [2]. Such commitments can be enforced in part, but not fully.

Features that make enforcement possible

• Treaty provision, not an MoU: the Commerce Minister calls the commitment a legally binding part of the agreement [3].
• Clawback safeguard: India can withdraw FTA benefits if the investment commitments are not met. No earlier Indian FTA had this [3].
• Quality filter: FPI is excluded, so only long-term, capacity-building capital counts [2].
• Leverage kept: dairy, soya and coal are on India's exclusion list. The effective duty on gold, which is over 80% of India's imports from EFTA, is unchanged [4]. India therefore gave up little upfront.

Limits to enforcement

• Effort, not outcome: "shall aim" binds governments to try, not to deliver a fixed inflow [2].
• Private choice: EFTA governments cannot order firms to invest in India. Each company decides for itself.
• Steep path: Switzerland is the largest EFTA investor. Its FDI into India was USD 10.87 bn over April 2000–June 2025 [5], under USD 0.5 bn a year. The first milestone needs about USD 5 bn a year from all four states.
• Unclear trigger: public releases do not say how a shortfall is measured or which concessions would be withdrawn [2][3]. Using the clawback would also raise prices for Indian buyers, so the threat is costly for India.
• Late test, hard attribution: the first milestone falls only in 2035. It is also hard to separate FDI caused by TEPA from FDI that would have come anyway.

Making it enforceable

• DPIIT should publish a yearly report of EFTA FDI from 1 October 2025, measured against the Article 7.1 path.
• The clawback rules should be written down now, while relations are good.
• The India–EFTA Desk should report projects and jobs created, linked to Make in India/PLI sectors.

Overall, target-based commitments work as economic and political leverage, not as guarantees a court can enforce. Clear numbers, transparent monitoring and a credible clawback can turn TEPA's "aim" into results. This would advance SDG 8 (decent work) and SDG 17 (partnerships) and make TEPA a model for future FTAs.