UPSC Mains
GS Paper II
International Relations
India–EFTA TEPA at One Year: Investment, Technology and Arctic Partnership
The India–EFTA TEPA completed one year on 1 October 2026 — signed in 2024 and in force since 1 October 2025, it focuses on investment, jobs and technology cooperation in geothermal energy, CCUS and ocean-based value addition
EFTA INVESTMENT TARGET
USD 100 billion over 15 years
JOBS TARGET
One million direct jobs
TARIFF COVERAGE
99.6% of India’s exports; 95.3% of EFTA’s
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Why in News & TEPA at a Glance
Why in News
- India–EFTA TEPA completed one year on 1 October 2026; the agreement, signed in 2024, came into force on 1 October 2025.
- It focuses on investment, jobs and technology cooperation, with key areas including geothermal energy, Carbon Capture, Utilisation and Storage (CCUS) and ocean-based value addition.
TEPA at a Glance
- EFTA has four members: Iceland, Liechtenstein, Norway and Switzerland. It is separate from the European Union.
- TEPA is India’s first FTA with developed European nations and its first with a dedicated investment and job creation chapter.
- EFTA states aim to raise investment in India by USD 100 billion over 15 years (USD 50 billion in 10 years and USD 50 billion in the next 5) and to facilitate one million direct jobs.
- Tariff concessions: EFTA covers 99.6% of India’s export value, while India covers 95.3% of EFTA’s export value, promoting easier market access.
Target, not a guarantee: The treaty says EFTA states “shall aim” to achieve this, so it is a target and not a guaranteed inflow.
Areas of Cooperation
- Geothermal energy: At Tapri, Kinnaur (Himachal Pradesh), geothermal heat is being used to dry and process fruits, helping farmers add value to their produce.
- Carbon Capture, Utilisation and Storage (CCUS): Iceland’s CarbFix technology converts more than 95% of injected CO₂ into solid minerals within two years. This is relevant to India because its Deccan Trap basalts have similar geological characteristics.
- Arctic cooperation: India has been an Arctic Council Observer since 2013, adopted its Arctic Policy in 2022, and operates the Himadri research station in Svalbard.
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Source: The Hindu
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Why It Matters
Strategic Gains
- Strengthens India’s economic engagement with Europe beyond the EU framework.
- Provides a direct channel for cooperation with Iceland on Arctic affairs.
- Complements the broader India–EU FTA process.
Economy Gains
- Combines market access with investment and job-creation targets.
- Greater services access and recognition of professional qualifications can benefit IT, nursing and business services.
Climate Gains
- Geothermal energy can reduce fossil-fuel use for heating and food processing.
- CCUS can support decarbonisation of steel, cement, refining and chemicals, contributing to Net Zero 2070.
Tech Gains
- Cooperation can include technology transfer, storage assessment and joint projects.
Social Impact
- Geothermal drying and storage can help farmers avoid distress sales.
- Better fish processing and value addition can create coastal employment.
Strategic Importance
- Geothermal energy can improve energy security in remote frontier areas by reducing dependence on fuel supply routes.
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Source: The Hindu
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Significance
- Diversified trade: Indian exporters gain access to a high-income market.
- Investment-linked model: TEPA can serve as a template for future agreements, including the India–EU FTA.
- Technology access: It brings know-how, not just capital, in sectors where India has limited experience.
- Climate goals: It supports decarbonisation in sectors that renewables alone cannot reach.
- Rural livelihoods: Better storage and processing reduce post-harvest losses and strengthen farmers’ bargaining power.
- Blue economy: Using more of each fish adds value without increasing fishing pressure.
- Arctic engagement: A trusted Arctic State partner helps India build research capacity and a voice in Arctic governance.
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Source: The Hindu
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Challenges
Investment Targets
Investment targets depend on private companies, and actual project-level results remain limited after one year.
CCUS
It is still costly and at a pre-commercial stage, with gaps in rules for CO₂ storage and liability.
Geology
Iceland’s basalt-based results cannot be directly applied to India without site-specific studies.
Non-Tariff Barriers
Strict European standards and regulations may make it harder for small Indian exporters.
Gold Trade
Gold is a major EFTA export to India, but TEPA provides limited benefits in terms of duty changes for it.
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Source: The Hindu
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Way Forward
Track Outcomes
Publish annual data on investment from each EFTA state and jobs created.
Build a Pipeline
The India–EFTA Desk should list sector-wise opportunities and follow projects from announcement to completion.
Support MSMEs
Help small businesses meet European standards and quality requirements.
Fisheries
Improve cold chains and fish by-product processing while protecting traditional fishers.
Legal Framework for CCUS
Frame rules on CO₂ transport, storage sites and liability, and run basalt storage pilots.
Geothermal Demonstrations
Start small direct-use projects in the Himalayan states with local participation.
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Source: The Hindu
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Value Addition
Constitutional Provisions
- Article 253 (legislation to implement treaties)
- Article 51 (respect for international law)
- Article 48A (protection of the environment)
Data and SDGs
- Data: NITI Aayog estimate of 750 million tonnes of CO₂ capture per year by 2050.
- SDGs: 7 (Energy), 9 (Industry), 13 (Climate), 14 (Oceans), 17 (Partnerships).
Conclusion: TEPA’s success will depend on actual investment, jobs and technology transfer. With proper pilots, clear regulations and community participation, areas like geothermal energy, CCUS and fisheries can support sustainable growth and provide a model for future agreements, including the India–EU FTA.
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Source: The Hindu
