New Delhi

As India deepens its economic engagement with the European bloc, Invest India is set to host a high-level discussion titled "From R&D to Global Supply Chains: India-EFTA Collaboration in Pharmaceuticals and Biotechnology" on February 18.

The session is expected to explore expanding cooperation between India and the member states of the European Free Trade Association (EFTA) comprising Switzerland, Norway, Iceland, and Liechtenstein, in critical sectors.

Prasoon Dewan, CEO of Divish Aurum Private Limited and Chairman of India Icelandic Business Association, while speaking to ANI on which Indian industries stand to gain the most under phased tariff reductions, said that export-oriented and labour-intensive sectors are likely to be the primary beneficiaries.

According to Dewan, these include textiles and apparel, processed foods, agricultural products such as rice, tea and coffee, engineering goods, chemicals, leather, gems and jewellery, and marine products.

"The immediate beneficiaries are export oriented and labour intensive sectors where EFTA markets offer high purchasing power, notably textiles and apparel, processed foods, agri-products (rice, tea, coffee), engineering goods, chemicals, leather, gems and jewellery, and marine products. These sectors benefit from near total duty elimination by EFTA," he said.

On the other hand, import-competing segments exposed to phased tariff reductions in India, particularly precision machinery, medical devices, high-end engineering goods, electronics, and certain premium consumer products from Switzerland and Norway, are likely to face longer adjustment pain.

"The longer adjustment pain is likely for import-competing segments exposed to phased tariff reductions in India, particularly precision machinery, medical devices, high end engineering goods, electronics and certain premium consumer products from Switzerland and Norway. While tariff phasing gives domestic industry time to adjust, competitiveness pressures will rise steadily, especially for MSMEs that lag on technology, scale or standards compliance," he added.

On the issue of gold dominating India-EFTA trade, Dewan stated that TEPA largely coexists with the existing structural imbalance rather than directly resolving it. Gold, primarily refined in Switzerland, remains outside tariff liberalisation, reflecting India's macroprudential approach to gold imports and forex management.

"TEPA largely coexists with the gold-driven imbalance rather than resolving it. Gold is primarily refined in Switzerland and remains outside tariff liberalisation, reflecting India's macro prudential approach to gold imports and forex management. As a result the headline trade deficit remains structurally intact in the near term. TEPA aims to dilute gold's dominance over time by expanding non gold exports and deepening investment led trade in manufacturing and services. Any real rebalancing will be gradual and driven by export diversification and FDI outcomes, not by changes to gold trade itself," he said.

Dewan also described the agreement as a potential test case for India's services push in future free trade agreements. He stated that the framework could serve as a template in negotiations with other advanced economies.

"I think this is one of TEPA's most understated but strategic dimensions. While modest on headline services liberalisation, the agreement places strong emphasis on investment, mobility of professionals, mutual recognition, and long term economic integration. This creates a template India may have used in negotiations with the EU, UK and other advanced economies. Importantly TEPA shows India's preference for a calibrated, trust-based approach to services anchoring market access to investment commitments and employment outcomes, rather than sweeping liberalisation. In that sense, it functions as a precedent for India's next generation FTAs with other countries. TEPA is not only about immediate trade numbers but more about signalling, it positions India as open to deep, high-standard economic partnerships while retaining policy space in sensitive areas. Its success will ultimately be judged by investment flows, supply-chain integration and services outcomes rather than short-term trade balances," he said.

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Notably, India and EFTA signed the Trade and Economic Partnership Agreement (TEPA) on 10 March 2024 which took effect on 1 October 2025, marking India's first FTA with four developed European nations. TEPA commits USD 100 billion in investments and 1 million direct jobs over 15 years, the first binding pledge of its kind in any Indian FTA.

At its core, the agreement envisions unlocking $100 billion in investments and creating one million direct jobs in India over the next fifteen years, marking it as one of the most forward-looking trade partnerships in the country's economic history.