Text of Prime Minister’s Press Statement during Joint Press Statement with the President of Switzerland

1. At a Glance

• What it is: On 5 Oct 2026 the Prime Minister gave this press statement in New Delhi during the visit of the President of Switzerland. The President came with a large business delegation [1].
• Main theme: turning the India–EFTA TEPA, India's first FTA with any economic bloc in Europe, into actual investment and jobs [1].
• New agreements: transport, mobility and infrastructure; Migration & Mobility Partnership; Young Professionals Agreement. Cooperation was also agreed in principle on defence production and nuclear energy [1].
• Why it matters for UPSC: it links GS-II (bilateral relations, groupings) with GS-III (FDI, trade and the FTA approach, AI governance).

2. Why in the News

• 5 Oct 2026: the PM's statement during the Swiss President's state visit [1].
• 7 Oct 2026: the India–EFTA "Prosperity Summit" with business leaders, held with the Swiss President present [1].
• This is the first anniversary of TEPA, which entered into force on 1 Oct 2025 [1][2].
• Feb 2026: India hosted the AI Impact Summit 2026. Switzerland will host the Geneva AI Summit next year (2027) [1][5].

3. Background & Evolution

• 14 Aug 1948: Treaty of Friendship signed in New Delhi. It was one of the first such treaties signed by independent India and came into force on 5 May 1949 [4].
• Basis of the relationship: shared democracy and rule of law. India's non-alignment and Switzerland's neutrality fit together well [4].
• Historical links: Swami Vivekananda (19th century) saw "a glimpse of the Himalayas" in the Swiss Alps. Mahatma Gandhi also spent time in Switzerland [1].
• Swiss Presidents' visits to India:
• Flavio Cotti, 1998 (the first ever) [4]
• Doris Leuthard, 30 Aug–2 Sep 2017 [4]

• Guy Parmelin, 19–20 Feb 2026 (AI Impact Summit) [4][5]

• Indian Presidents' visits to Switzerland: V.V. Giri (1975), A.P.J. Abdul Kalam (May 2005), Ram Nath Kovind (11–15 Sep 2019) [4].

• TEPA timeline: 21 rounds of negotiation over about 16 years → signed 10 Mar 2024, New Delhi → in force 1 Oct 2025 [2][4].

4. Core Static Facts

Item	Fact
EFTA members	Switzerland, Norway, Iceland, Liechtenstein [3]
TEPA signed / in force	10 Mar 2024 / 1 Oct 2025 [2]
Investment target	USD 100 bn over 15 years: USD 50 bn in the first 10 years, then USD 50 bn in the next 5 [3]
Jobs target	1 million (10 lakh) direct jobs [1][3]
EFTA's tariff offer	92.2% of tariff lines, covering 99.6% of India's exports [3]
Services: India's offer	105 sub-sectors [3]
Services: what India gets	Switzerland 128, Norway 114, Iceland 110, Liechtenstein 107 sub-sectors [3]
MRAs	Planned for professional services such as nursing, chartered accountancy and architecture [3]
Bilateral trade	USD 23.27 bn in FY 2024-25; Switzerland was India's 15th largest trading partner [4]
Swiss FDI into India	USD 10.87 bn (Apr 2000–Jun 2025); 12th largest source [4]
Indian ODI to Switzerland	USD 8.9 bn (Apr 2000–Aug 2025); 10th largest destination [4]
Nodal ministries	MEA (diplomacy); Dept of Commerce, MoCI (TEPA) [2][4]

5. Multi-Dimensional Analysis

Economic

• Indian exports should benefit in agriculture, pharma, textiles and engineering goods [1].
• Swiss investment is being sought in biotech, life sciences, banking, insurance, food processing and sustainability [1].
• TEPA has a binding investment-and-jobs commitment. This is new for an Indian FTA, which usually covers only tariffs [3].
• The stated aim is trusted supply chains and reliable solutions for the world [1].

Geopolitical / Strategic

• New possibilities were identified in military exchanges and defence production, and both sides agreed to deepen nuclear energy cooperation [1].
• Both sides back peace efforts on Ukraine and West Asia, and agreed that global institutions need reform [1].
• Switzerland's neutrality and Geneva's role in multilateral diplomacy make it a useful partner for India's strategic autonomy [4].

Infrastructure & Technology

• Swiss involvement cited: the Varanasi ropeway, Jewar (Noida) airport, and hill railways and tunnelling [1].
• A new Transport, Mobility & Infrastructure agreement was signed [1].
• Joint research projects are planned in health, clean energy and space [1].
• An agreement with the University of Zurich will build the capacity of Indian science start-ups [1].
• Both sides commit to responsible, inclusive, human-centric AI [1].

Social / People-to-people

• The Migration & Mobility Partnership and Young Professionals Agreement open opportunities for Indian students, researchers and professionals [1].
• The statement notes the growing popularity of Yoga and Ayurveda in Switzerland [1].

6. Recent Developments (last 12–18 months)

• 1 Oct 2025: India–EFTA TEPA enters into force [2][6].
• 19–20 Feb 2026: Swiss President Guy Parmelin attends the AI Impact Summit 2026 in New Delhi and holds bilateral talks with the PM; both welcome the momentum from TEPA [5].
• 5 Oct 2026: state visit. Agreements signed on transport, mobility and infrastructure; on migration and mobility; and on young professionals [1].
• 7 Oct 2026: India–EFTA Prosperity Summit [1].
• 2027: Switzerland to host the Geneva AI Summit [1].

7. Prelims Hooks

• The India–EFTA TEPA is India's first FTA with any European economic bloc [1].
• EFTA has 4 members: Switzerland, Norway, Iceland, Liechtenstein. The EU is not a member [3].
• TEPA was signed on 10 Mar 2024 in New Delhi and entered into force on 1 Oct 2025 [2].
• TEPA targets USD 100 bn in investment over 15 years and 1 million direct jobs [3].
• The investment comes in two parts: USD 50 bn in 10 years plus USD 50 bn in the next 5 [3].
• EFTA's offer covers 92.2% of tariff lines, which account for 99.6% of India's exports [3].
• India offered 105 services sub-sectors. Switzerland offered India the most of any EFTA member: 128 [3].
• The Treaty of Friendship was signed on 14 Aug 1948 and came into force on 5 May 1949 [4].
• The first visit by a Swiss President to India was by Flavio Cotti in 1998 [4].
• Switzerland was India's 15th largest trading partner in FY25, with trade of USD 23.27 bn [4].
• Switzerland is the 12th largest FDI source for India (USD 10.87 bn, 2000–2025) [4].
• Swiss-linked projects in India: the Varanasi ropeway and Jewar airport [1].
• The India–EFTA "Prosperity Summit" was held on 7 Oct 2026 [1].
• Geneva AI Summit in 2027 follows India's AI Impact Summit of Feb 2026 [1][5].

8. Is the USD 100 Billion a Promise or Only a Target?

• The text says EFTA will 'aim to' invest. It does not say EFTA 'shall' invest.
• The official wording is that EFTA States "shall aim to increase" FDI (foreign direct investment, meaning money put into factories, companies and long-term projects) by USD 50 bn in 10 years and another USD 50 bn in the next 5 [3].
• Governments in Bern or Oslo cannot order private companies where to invest. So this is a target that both sides will watch, not a payment that can be forced.

• Section 5 of this note calls it a "binding" commitment. In an answer, write "a time-bound investment target". That is the safer and more accurate phrase.

• Only long-term money counts towards the target.

• FPI (foreign portfolio investment, meaning short-term buying of shares and bonds) is excluded [3].

• This is good for India, because only money that builds plants and creates jobs is counted. But it also makes the target harder to reach, since quick stock-market money cannot fill the gap.

• The pace has to rise about ten times

• In about 25 years (Apr 2000 to Jun 2025), all Swiss FDI into India added up to USD 10.87 bn. That is under USD 0.5 bn a year [4].
• The first part of TEPA needs about USD 5 bn a year from the four EFTA countries together [3].

• So the 25 years of Swiss investment so far is only about one-fifth of what EFTA must bring in during the first 10 years alone.

• One year on, we do not yet have a number to judge it by

• The sources behind this note give no figure for how much EFTA FDI has actually come in since TEPA started on 1 Oct 2025 [1][2].
• The Prosperity Summit and the business delegation show that both sides are trying. But the real test is the yearly FDI data.

9. What India Opened Up, and What It Kept Protected

• India opened less of its market than EFTA did, and this was a deliberate choice.
• EFTA opened 92.2% of its tariff lines (a tariff line is one product category in the customs list). These cover 99.6% of India's exports [3].
• India opened 82.7% of its tariff lines, which cover 95.3% of EFTA's exports [3].

• So India gets more market access than it gives. In return, it accepted the investment target.

• Farmers and sensitive sectors are kept out of the deal

• Dairy, soya, coal and sensitive farm products are on the exclusion list, so their tariffs do not fall [3].

• Dairy matters most here. Switzerland and Norway are strong in dairy, and cheap imports could hurt small Indian dairy farmers.

• Tariffs fall slowly for industries India is trying to build

• For products under Make in India and the PLI scheme (Production Linked Incentive, where the government pays firms a bonus for producing more in India), tariff cuts are spread over 5 to 10 years [3].
• This gives Indian firms time to grow before they face full Swiss and Norwegian competition.

• The risk: if these firms are still not competitive when the protection ends, the pressure simply arrives later.

• Medicines: India says it gave up nothing beyond WTO rules

• Rich countries often use FTAs to demand stronger patent rules. These can delay cheap generic medicines (copies sold after a patent ends).
• The government says TEPA's IPR (intellectual property rights) chapter stays at TRIPS level, which is the WTO's basic standard. It also says India's safeguards against evergreening remain [3]. Evergreening means extending a patent by making small changes to an old drug.
• This matters because Switzerland is home to big pharma companies, and India supplies generic medicines to many developing countries.

10. A Tax Dispute That Can Make Swiss Investors Hesitate

• What the dispute is about
• India and Switzerland have a DTAA (Double Taxation Avoidance Agreement, a treaty so that the same income is not taxed in both countries) [7].
• It contains an MFN (most-favoured-nation) clause. If India later gives a lower tax rate to another OECD country, Switzerland gets that lower rate too [7].

• When Lithuania joined the OECD, Swiss companies argued that the tax on dividends from Indian subsidiaries should fall from 10% to 5% [7].

• The Supreme Court ruled against the automatic benefit

• In Assessing Officer v. Nestle SA (19 Oct 2023), the Supreme Court held that the lower rate does not apply automatically. India must first issue a notification under Section 90 of the Income Tax Act [7].

• The CBDT (Central Board of Direct Taxes) had earlier set out India's position on such MFN clauses in Circular No. 3/2022 [8].

• Why this matters for TEPA

• When a Swiss company decides where to invest, it compares the money it can send home after tax.
• A higher dividend tax than expected makes India less attractive. This happens just when India needs Swiss FDI to grow about ten times.
• Trade policy (TEPA) and tax policy (the DTAA) are run by different ministries. If they pull in different directions, the investment target suffers.

11. Who Must Do What Before the Next Review

• Department of Commerce: publish yearly FDI figures against the target
• The target is about USD 5 bn a year in the first 10 years, and FPI does not count [3].

• A public yearly figure, country by country, would show early whether TEPA is on track, well before the 10-year mark.

• CBDT and the Swiss tax authority: settle the MFN question in a treaty protocol

• After the Nestle ruling, the dividend tax rate depends on whether India issues a notification [7].

• A clear amending protocol to the DTAA, negotiated by both governments, would give investors a fixed rate. That removes one reason to delay investing.

• Department of Commerce with the PLI ministries: use the phase-in years to test Indian firms

• Protected PLI products get 5 to 10 years before tariffs fall [3].

• Each year, ministries should check whether these firms can compete on cost. If they cannot, the support should change before the protection ends.

• MEA and professional bodies: sign the MRAs, not just the mobility deals

• MRAs (mutual recognition agreements, where each country accepts the other's professional qualifications) are only planned for nursing, chartered accountancy and architecture [3].
• The Young Professionals Agreement and Migration & Mobility Partnership let Indians travel to Switzerland [1]. But without an MRA, an Indian nurse or architect may not be allowed to practise their profession there.
• Bodies such as ICAI (for chartered accountants) need to finish these talks so that the mobility deals lead to real jobs.

12. Anchors for Answers

• Data: EFTA opened 92.2% of tariff lines (99.6% of India's exports). India opened 82.7% (95.3% of EFTA's exports) [3]
• Data: Swiss FDI of USD 10.87 bn over about 25 years, against an EFTA target of USD 50 bn in 10 years [3][4]
• Law/Case: Assessing Officer v. Nestle SA, Supreme Court, 19 Oct 2023: the DTAA's MFN benefit needs a notification under Section 90 of the Income Tax Act [7]; CBDT Circular No. 3/2022 [8]
• Scheme: PLI and Make in India: tariff cuts on these products phased over 5 to 10 years under TEPA [3]

13. Mains Relevance

• GS-II: Bilateral, regional and global groupings and agreements involving India; effect of policies of developed countries on India's interests.
• GS-III: Effects of liberalisation on the economy; investment models; infrastructure; science and technology (AI).
• Possible questions: 1. The India–EFTA TEPA marks a shift from tariff-centric to investment-linked FTAs. Examine its significance for India's trade strategy. (15 marks) 2. Discuss how India–Switzerland cooperation in infrastructure, technology and mobility can support India's development goals. (10 marks) 3. Middle powers like India and Switzerland are shaping global AI governance. Comment. (10 marks)

14. Related Topics to Study Next

• India–EU FTA / BTIA: compare it with EFTA TEPA, since EFTA is a separate bloc from the EU.
• India–UK CETA: another recent FTA with a developed economy.
• India's FTA approach (Australia ECTA, UAE CEPA): to understand the shift towards "new-generation" FTAs.
• AI Impact Summit 2026 and IndiaAI Mission: the AI-governance strand of the statement.
• Black money, Swiss bank accounts and Automatic Exchange of Information: a long-running theme in India–Swiss relations.
• Migration & Mobility Partnership Agreements (Germany, France, others): the template for talent mobility deals.
• Global institution reform (UNSC, WTO): a joint position stated by both sides.

15. NCERT Concepts to Revise

• Free trade agreement (Economy): TEPA is India's first FTA with a European bloc; you need to know how FTAs work.
• Foreign Direct Investment (Economy): The deal's core aim is USD 100 bn of FDI, and Swiss FDI is the key benchmark.
• Foreign portfolio investment (Economy): FPI is excluded from the target, so you must tell it apart from FDI.
• Double Taxation Avoidance Agreement (Economy): The India–Swiss DTAA dispute over dividend tax could make Swiss investors hesitate.
• Most-favoured-nation principle (Economy): The DTAA's MFN clause and the Nestle ruling turn on this non-discrimination idea.
• Production-linked incentive (Economy): Tariff cuts on PLI and Make in India products are phased over 5 to 10 years.

16. Common Errors / Trap Areas

• EFTA vs EU: EFTA has only 4 members, and none of them is in the EU. TEPA is not the India–EU FTA.
• Signing vs entry-into-force dates: signed Mar 2024, in force Oct 2025. Don't mix them up.
• The 1 million figure means direct jobs, and the USD 100 bn is spread over 15 years, not 10 [3].
• Services numbers: 105 is India's offer to EFTA; 128 is what Switzerland offered India. Don't swap them.
• Who visited: the 5 Oct 2026 release doesn't name the President [1]. Guy Parmelin held the post in Feb 2026 [5], so he is very likely the visitor, but that is an inference. Also, the Swiss presidency rotates every year, so don't treat Parmelin as a permanent head of state.