India–EFTA TEPA marks a shift from tariff-centric to investment-linked trade agreements. Critically examine.

The India–EFTA Trade and Economic Partnership Agreement (TEPA) was signed on 10 March 2024 and entered into force on 1 October 2025 [3]. It is the first Indian FTA to write a commitment on investment and jobs into the treaty itself [1]. This makes it a real shift away from purely tariff-based bargaining, but only a partial one.

How TEPA marks the shift

• Investment is in the treaty text: Article 7.1 sets a target of $50 bn of FDI in the first 10 years and another $50 bn in the next 5, along with 1 million direct jobs [2].
• The target is for long-term capital: it counts only FDI and excludes portfolio flows, so it aims at building productive capacity [3].
• India has a way to enforce it: if the target is missed, India can seek consultations and then rebalance its tariff concessions [4].
• It goes beyond goods: TEPA has 14 chapters, covering services, IPR and sustainable development. It also includes MRAs for nursing, chartered accountancy and architecture [2].

Tariff access → FDI target → Jobs → Review → Rebalancing if unmet

TEPA's investment-linked logic

Limits of the shift

• Tariffs are still the core of the deal: EFTA opens 92.2% of its tariff lines, covering 99.6% of India's exports. India opens 82.7% of lines, covering 95.3% of EFTA's exports [2].
• The wording is unclear: one official release calls the target a "binding commitment" [1], and another calls it an "objective" [3].
• Investment depends on private companies: EFTA governments are only obliged to promote investment [4]. They cannot order companies to invest.
• The remedy comes late: India can rebalance only after reviews and a grace period, and only on goods concessions [4]. Using it would also strain relations with friendly partners.
• Gold makes the numbers look bigger: gold is over 80% of India's imports from EFTA, and TEPA did not change the effective duty on it [1].
• India kept sensitive sectors out: dairy, soya, coal and pharmaceuticals are excluded from its tariff cuts [2].

Overall, TEPA is a hybrid: tariffs are still what India gives, but investment is now what it expects in return. The Department of Commerce should publish a yearly scorecard of FDI and jobs from EFTA, measured against the Article 7.1 targets. In the EU talks, India should state plainly whether the investment figure is binding. Done well, investment-linked FTAs can advance SDG 8 (decent work and economic growth).