Amid the ongoing tariff concerns, the Government of India has reiterated that the European Free Trade Agreement (EFTA) is on track and will become operational from October 1, 2025.
At the same time, discussions around a potential trade agreement with the United States remain stalled. A U.S. delegation that was expected to visit India on August 25 or 27 did not arrive, signaling uncertainty in bilateral negotiations.
What’s the EFTA?
ETFA is the European Free Trade Agreement.
The EFTA, which includes Switzerland, Norway, Iceland, and Liechtenstein, is significant for India as it will open doors to preferential and concessional duties on goods. At a time when Indian exports to the U.S. are facing steep tariff hikes—some products witnessing duties as high as 50% after an additional 25% tariff came into effect—the EFTA deal is expected to provide much-needed relief by reducing duty burdens and improving export competitiveness.
Why is EFTA significant?
Officials emphasized that products exported from India to EFTA countries will benefit from lower duties, while imports from these nations into India will also attract reduced tariffs. This mutual concession is expected to strengthen trade ties and diversify India’s export markets at a critical juncture.
In parallel, India is actively pursuing other Free Trade Agreements (FTAs). Negotiations with the European Union are progressing, while a bilateral FTA with Oman has already been concluded and is nearing formal signing. Discussions are also underway with New Zealand.
The government is closely monitoring trade developments and engaging with stakeholders, particularly exporters heavily reliant on the U.S. market, to identify alternative destinations. The strategy is to utilize FTAs not only to mitigate tariff shocks but also to expand opportunities for Indian exports in over 50 potential partner countries.
Amidst the current tariff center, the Indian government has reiterated and confirmed that the EFTA is on track.
We have talked and already concluded with Oman and we are closing in on the terms of signing. As far as presently New Zealand is concerned, we are also talking to them. The focus of FTA utilization, where we have reached the saturation, is also on the cards, and also, Indians are looking at 50, both countries, where we can export the items which we are exporting to the US, but because of the tariff, they are not able to do that. So everything is on the cards, and the government is keeping a very close watch, talking to stakeholders, especially those who are heavily invested in the US. Okay. We leave it there for the moment. Pragya, thank you very much for joining us. This is news coming.
