The India-EFTA partnership, one plus one equals three, Pg6

Key Highlights:

• The Trade and Economic Partnership Agreement (TEPA) between India and the four European Free Trade Association (EFTA) states (Iceland, Liechtenstein, Norway, Switzerland) entered into force on October 1, 2025.
• EFTA states offered concessions on 92.2% of their tariff lines, covering 99.6% of India’s exports by value.
• India granted concessions on 82.7% of its tariff lines, covering 95.3% of EFTA’s exports by value.
• TEPA includes a dedicated chapter on investment and job creation, targeting $100 billion in investment in India over 15 years and facilitating one million direct jobs.
• The partnership focuses on key areas such as geothermal energy, carbon capture, utilisation and storage, and the ocean economy.

Detailed Insights:

• This agreement represents an ambitious market-opening exercise between India and a group of developed economies.
• Iceland's expertise in geothermal energy, particularly the direct use of low-to-medium temperature heat, offers valuable lessons for India's Himalayan geothermal belt.
• An Indian-Icelandic venture, Geotropy, operates a geothermal facility at Tapri, Kinnaur district, Himachal Pradesh, for fruit drying and cooling.
• A NITI Aayog study in 2022 estimated India's potential to capture 750 million tonnes of carbon dioxide annually by 2050.
• The Department of Science and Technology published India's first R&D roadmap for Carbon Capture, Utilisation and Storage (CCUS) in December 2025, supporting the 2070 net-zero goal.
• The Union Budget allocated ₹20,000 crore over five years to scale up CCUS technologies in various industries.
• Public sector companies like Oil and Natural Gas Corporation (ONGC), NTPC Limited, and Indian Oil Corporation Limited are undertaking CCUS feasibility studies and pilot projects.
• Iceland's CarbFix project demonstrates that CO2 injected into basalt can turn to stone within two years, a process relevant to India's Deccan Trap basalts.
• Carbon Iceland signed an MoU with JSW Steel and Bharatia to explore a 300,000-tonne-a-year e-methanol project in Raigad, Maharashtra, converting steel-plant emissions into fuel.
• Iceland's ocean economy expertise includes sustainable fisheries management, cold-chain logistics, and value-added processing, utilizing up to 90% of each fish landed.
• India, an Observer to the Arctic Council since 2013, published its Arctic Policy in 2022 and operates the Himadri research station in Svalbard.
• TEPA is seen as a complement to the EU-India Free Trade Agreement (FTA), providing a working model for future Europe-India trade relations.

Key Concepts Involved:

• Trade and Economic Partnership Agreement (TEPA): A comprehensive free trade agreement covering trade in goods, services, investment, and other economic cooperation areas.
• European Free Trade Association (EFTA): An intergovernmental organization promoting free trade and economic integration among its four member states: Iceland, Liechtenstein, Norway, and Switzerland.
• Carbon Capture, Utilisation and Storage (CCUS): Technologies that capture carbon dioxide emissions from industrial sources, preventing their release into the atmosphere, and either storing them underground or reusing them.
• Net-zero goal: The objective of achieving a balance between the amount of greenhouse gas emissions produced and the amount removed from the atmosphere, effectively reaching zero net emissions.