EFTA-India TEPA Deep Dive: What Nordic Companies Should Know

Why TEPA Is a Watershed Moment for Nordic Companies in India

After 16 years of intermittent negotiations, the Trade and Economic Partnership Agreement (TEPA) between India and the four EFTA states — Switzerland, Norway, Iceland, and Liechtenstein — entered into force on October 1, 2025. For Nordic companies evaluating India as a growth market, TEPA fundamentally changes the calculus. It is India's first free trade agreement with developed European economies, and it carries a binding USD 100 billion foreign direct investment (FDI) commitment — the first pledge of its kind in any Indian FTA.

The agreement spans 14 chapters covering trade in goods, rules of origin, customs procedures, sanitary and phytosanitary measures, technical barriers to trade, trade in services, investment promotion, intellectual property rights, government procurement, competition policy, dispute settlement, and sustainable development. For Nordic firms in sectors like renewable energy, life sciences, precision engineering, and digital transformation, the practical implications are substantial.

Cumulative trade between India and the Nordic countries has historically hovered around USD 6 billion annually, with four of the five Nordic countries ranking among India's top 20 European trading partners — Sweden at 9th, Finland 10th, Denmark 12th, and Norway at 14th. TEPA supercharges this baseline by removing tariff barriers and creating institutional mechanisms that did not previously exist. The agreement also arrives at a moment when India is accelerating its position as an alternative manufacturing hub under the China-Plus-One strategy, making the timing particularly advantageous for Nordic manufacturers seeking to diversify their Asian supply chains.

The $100 Billion FDI Commitment: What It Actually Means

Article 7.1 of TEPA sets out the most discussed provision: EFTA states shall aim to increase FDI from their investors into India by USD 50 billion within 10 years of entry into force, and an additional USD 50 billion in the succeeding 5 years — totalling USD 100 billion over 15 years. Alongside this, EFTA states aim to facilitate the generation of 1 million direct jobs in India from these investment inflows.

Key Details Nordic Companies Must Understand

• Explicit FPI exclusion: The commitment specifically excludes foreign portfolio investment, focusing exclusively on long-term productive capital — meaning subsidiaries, joint ventures, and greenfield operations in India count toward this target
• Binding but aspirational: While unprecedented in any Indian FTA, the commitment uses the language "shall aim to" — it creates a political and institutional obligation rather than a strict legal penalty for non-achievement
• Dedicated EFTA Desk: Operational since February 2025, a single-window mechanism facilitates EFTA businesses investing, expanding, and establishing operations in India
• Sector focus: Investment facilitation is directed toward renewable energy, life sciences, engineering, and digital transformation — sectors where Nordic companies hold particular strength

Switzerland alone accounts for the lion's share of historical EFTA FDI into India, with USD 10.87 billion between April 2000 and June 2025. Norway contributed USD 941.81 million, Liechtenstein USD 110.26 million, and Iceland USD 54.07 million. With the USD 100 billion target, investment flows are expected to accelerate dramatically across all four nations.

Historical FDI Breakdown by EFTA Country

The EFTA-India TEPA Sectoral Webinar Programme launched in 2026 provides Nordic companies with industry-specific briefings on how to leverage the agreement. These webinars cover pharmaceuticals, renewable energy, financial services, and digital transformation — and are a practical first step for any Nordic company evaluating India market entry under TEPA.

Tariff Reductions: What Nordic Exporters Gain

TEPA delivers asymmetric but meaningful tariff liberalization reflecting India's development needs and EFTA's market size.

EFTA's Market Access Offer to India

• 92.2% of tariff lines covering 99.6% of India's exports to EFTA
• 100% duty elimination on non-agricultural products
• Tariff concessions on processed agricultural products (PAP)

India's Market Access Offer to EFTA

• 82.7% of tariff lines covering 95.3% of EFTA exports to India
• Over 80% of EFTA imports are gold, where India maintains no change in effective duty
• Sensitive sectors protected: pharmaceuticals, medical devices, processed food, dairy, soya, coal, and sensitive agricultural products

Phased Elimination Timeline

Not all tariffs drop immediately. The implementation follows a structured schedule:

Nordic companies exporting precision machinery, industrial automation equipment, clean energy technology, and specialty chemicals to India stand to benefit most from immediate and 3-year tariff eliminations. Companies should work with customs advisors to map their specific HS codes against the TEPA tariff schedule to calculate exact duty savings.

Practical Tariff Calculation Example

Consider a Norwegian offshore wind component manufacturer exporting turbine blades to India. Prior to TEPA, customs duty on such components might range from 7.5% to 15% depending on HS code classification. Under TEPA's immediate elimination tranche, this could drop to zero. On a USD 2 million annual shipment, the duty savings alone represent USD 150,000 to 300,000 — funds that can be redirected toward market development, warehousing, or after-sales service infrastructure in India. Multiply this across a product portfolio and the competitive advantage over non-FTA competitors becomes decisive.

Nordic companies should also note that TEPA's rules of origin provisions determine which products qualify for preferential tariff treatment. Products must meet specified local content thresholds or undergo sufficient manufacturing transformation in EFTA countries to qualify. Companies with complex supply chains spanning multiple countries should verify that their products meet these origin requirements before claiming TEPA tariff benefits.

Services Liberalization: Professional Mobility and Market Access

For Nordic services companies — particularly in IT, consulting, financial services, and healthcare — TEPA opens significant doors.

Commitment Breadth

India has offered commitments in 105 sub-sectors. EFTA commitments vary by country: Switzerland (128 sub-sectors), Norway (114), Iceland (110), and Liechtenstein (107). This breadth exceeds India's WTO commitments and most of its other FTAs.

Mutual Recognition Agreements (MRAs)

TEPA enables MRAs in professional services including nursing, chartered accountancy, and architecture. For Nordic companies, this means:

• Easier deployment of professionals between EFTA and India
• Recognition of qualifications, reducing barriers for Nordic professionals working in Indian subsidiaries
• New avenues for Indian professionals in EFTA markets, supporting back-office and shared services operations

Key Opportunity Sectors

• IT and digital services: Enhanced framework for digital services exports and IT-enabled services
• Business services: Consulting, management, and advisory services covered
• Education services: Opportunities for Nordic educational institutions
• Audio-visual and cultural services: Specific commitments supporting media and content exchange

Sector-Specific Opportunities for Nordic Companies

Renewable Energy and Clean Technology (Norway, Iceland)

Norway's expertise in offshore wind, green maritime technology, and carbon management aligns directly with India's ambitious clean energy targets. Iceland's geothermal and renewable power expertise can support India's industrial decarbonization. Iceland has already made a USD 30 million investment in the fisheries sector in Maharashtra under TEPA's framework. Under India's FTA framework, tariff reductions on clean energy equipment make Norwegian and Icelandic technology more cost-competitive in the Indian market.

Pharmaceuticals and Life Sciences (Switzerland)

Switzerland's pharmaceutical leadership — exemplified by Roche Pharma's commitment of 1.5 billion Swiss francs (approximately INR 17,000 crore) in India over five years announced on October 1, 2025 — demonstrates the scale of opportunity. The removal of tariffs on formulations and active pharmaceutical ingredients (APIs) reduces costs for Swiss life sciences companies operating in India. TEPA's IP provisions align with TRIPS standards while prohibiting patent evergreening, protecting India's generics industry and providing regulatory predictability for Swiss innovators.

Precision Engineering and Industrial Automation (Switzerland, Liechtenstein)

Swiss and Liechtenstein precision machinery, industrial automation, and manufacturing equipment face reduced or eliminated import duties under TEPA. These products anchor India's Make in India supply chains, and TEPA makes the cost equation more favorable for buyers sourcing from EFTA suppliers over competitors from non-FTA countries.

Maritime and Shipping (Norway)

Norway's world-class maritime industry can leverage TEPA to expand into India's growing port infrastructure and digital port management space. Indian ports are undergoing significant modernization, and Norwegian companies in green shipping technology, digital ports, and offshore engineering have a natural alignment. The Sagarmala Programme — India's USD 120 billion port-led development initiative — creates demand for exactly the kind of technology that Norwegian maritime companies possess, from automated terminal management to green fuel bunkering infrastructure.

Financial Services (Switzerland, Liechtenstein)

Switzerland's banking and financial services sector has a long history in India. Under TEPA, enhanced services commitments create clearer pathways for Swiss wealth management firms, insurance companies, and fintech providers to expand Indian operations. Liechtenstein-based financial services companies can similarly leverage the agreement's services provisions. India's financial services sector — projected to reach USD 1.5 trillion by 2030 — offers substantial growth potential for Nordic financial companies willing to navigate the RBI and SEBI regulatory framework.

Food Processing and Agricultural Technology (All EFTA States)

India's food processing sector, growing at 8-10% annually, offers opportunities for Nordic food technology companies. Switzerland's expertise in chocolate and dairy processing, Norway's fish processing capabilities, and Iceland's advanced aquaculture technology align with India's ambitions to reduce post-harvest losses and build world-class food processing infrastructure. TEPA's tariff concessions on processed agricultural products facilitate equipment and technology imports.

Intellectual Property Protection Under TEPA

Nordic companies with significant IP portfolios need to understand TEPA's IP provisions carefully.

What TEPA Guarantees

• IP commitments aligned with TRIPS standards
• Prohibition on patent evergreening — protecting India's generic pharmaceutical industry while providing regulatory clarity
• Framework for trademark and industrial design protection

Areas Requiring Attention

Three IP-related commitments in TEPA go beyond existing TRIPS rules and may affect Nordic companies:

1. Pre-grant opposition: Changes to Indian rules on processes through which civil society can oppose patents before grant
2. Working of patents: Reduced disclosure requirements for patent holders regarding use of existing patents
3. Data exclusivity: Future negotiations between parties on rules for data exclusivity — a provision Swiss pharmaceutical companies will watch closely

Nordic companies should consult with Indian IP counsel to understand how these provisions interact with their existing patent and trademark portfolios in India. Trademark registration should be secured early in the India entry process.

Practical Steps for Nordic Companies Entering India Under TEPA

Step 1: Entity Structure Selection

Most Nordic companies entering India will establish a wholly owned subsidiary as a private limited company. Under the automatic route, 100% FDI is permitted in most sectors without prior government approval. Compare your options using our branch office vs subsidiary comparison.

Step 2: Regulatory Filings

Key compliance requirements include:

• SPICe+ registration: Single-window company incorporation form with MCA
• Digital signature certificates: Required for all directors, including foreign nationals
• FC-GPR filing: Must be submitted within 30 days of share allotment to report FDI inflows to RBI
• FLA return: Annual filing of foreign liabilities and assets
• GST registration: Mandatory for goods and services supply

Step 3: Leverage the EFTA Desk

The dedicated EFTA Desk — operational since February 2025 — serves as a single-window mechanism for EFTA businesses. Nordic companies should engage early with this desk for:

• Investment facilitation and regulatory guidance
• Sector-specific introductions to Indian government counterparts
• Support in navigating state-level incentive programs

Step 4: Appoint a Resident Director

Indian company law requires at least one resident director who has stayed in India for at least 182 days in the financial year. This applies regardless of TEPA — it is a Companies Act requirement. Many Nordic companies initially rely on a professional FDI advisory firm to source this appointment.

Step 5: Tax Planning and DTAA Utilization

Nordic companies should structure their India operations to leverage applicable Double Taxation Avoidance Agreements. India has bilateral DTAAs with Switzerland and Norway. Key considerations include transfer pricing documentation, permanent establishment risk management, and withholding tax optimization on royalties, fees, and dividends.

Step 6: Location Selection

India's federal structure means state-level incentives vary significantly. Nordic companies should evaluate:

• Gujarat: Strong manufacturing infrastructure, dedicated industrial zones, and proactive investment facilitation — particularly attractive for Norwegian energy companies and Swiss chemical manufacturers
• Karnataka (Bangalore): India's technology capital, ideal for Nordic IT, digital, and R&D operations. Home to several existing Scandinavian company offices
• Maharashtra (Mumbai/Pune): Financial services hub with strong manufacturing ecosystem. Swiss banks and financial services companies concentrate here
• Tamil Nadu (Chennai): Automotive and engineering manufacturing cluster with a history of Nordic industrial investment
• Telangana (Hyderabad): Emerging pharma and life sciences hub with competitive operating costs and strong government support for FDI

Each state offers distinct incentive packages including capital subsidies, stamp duty exemptions, land at concessional rates, and electricity tariff discounts. Nordic companies should negotiate state-level benefits in parallel with their incorporation process.

Common Mistakes Nordic Companies Make When Entering India

Based on patterns observed across hundreds of foreign company registrations in India, Nordic companies should avoid these common pitfalls:

• Underestimating compliance burden: Indian regulatory compliance is more intensive than in Nordic countries. Plan for monthly GST filings, quarterly advance tax payments, annual statutory audits, and ongoing FEMA reporting. Budget for a full-time compliance manager or outsourced compliance service from the outset
• Delaying resident director appointment: The 182-day residency requirement cannot be waived. Nordic companies that delay this appointment risk non-compliance penalties and inability to conduct board meetings
• Ignoring transfer pricing documentation: India's transfer pricing regime is among the world's most stringent. Nordic parent companies must maintain contemporaneous documentation for all inter-company transactions from day one — not retroactively at tax audit time
• Treating India as a single market: India is effectively 28 states with different labor laws, tax incentives, infrastructure quality, and business cultures. The right location decision can reduce operating costs by 20-40% compared to a poorly chosen alternative
• Expecting Nordic-speed approvals: While India has improved dramatically on ease of doing business, regulatory timelines for approvals, permits, and registrations are typically 2-4 times longer than Nordic benchmarks. Build buffer time into your market entry timeline

TEPA in Context: India's Expanding FTA Network

TEPA enters force at a time when India is aggressively expanding its FTA network. In 2025 alone, India concluded agreements with the UK (CETA), Oman (CEPA), and New Zealand, while negotiations continue with the EU, Canada, the GCC, and others. For Nordic companies, this means:

• First-mover advantage: TEPA provides market access advantages that competitors from non-FTA countries do not yet enjoy
• Supply chain integration: Nordic companies can position Indian operations as hubs for serving markets covered by India's other FTAs
• Regulatory precedent: TEPA's provisions on investment protection and IP may serve as templates for India's future agreements

Understanding the full landscape of India's free trade agreements helps Nordic companies develop a holistic market entry strategy.

Key Takeaways

• TEPA is live: In force since October 1, 2025, with tariff reductions already operational and phased eliminations over 3-10 years
• $100 billion FDI commitment: The largest investment pledge in any Indian FTA, targeting renewable energy, life sciences, engineering, and digital transformation
• Services access expanded: 105+ sub-sectors open with MRA provisions for professional mobility in nursing, chartered accountancy, and architecture
• Nordic sector strengths align: Clean energy (Norway, Iceland), pharma (Switzerland), precision engineering (Switzerland, Liechtenstein) all receive favorable treatment
• Act early: Engage the EFTA Desk, structure your entity via the automatic route, and secure IP protection before competitors from non-FTA countries catch up