India and the European Free Trade Association will review their trade agreement this October following a 22.72% drop in Indian exports during the April-June quarter of FY27. The meeting aims to fix customs and certification issues that have limited market access for Indian goods, despite the bloc's $100 billion investment pledge.
India and the four nations of the European Free Trade Association—Switzerland, Norway, Iceland, and Liechtenstein—are set to hold a high-level review of their Trade and Economic Partnership Agreement (TEPA) this October in New Delhi. The meeting comes as the trade deal, which became effective on October 1, 2025, has failed to boost export volumes as originally expected.
Trade data for the April-June quarter of the 2026-27 fiscal year shows a 22.72% decline in Indian exports to these countries, amounting to $461.64 million. This downturn adds to a 10.77% drop in exports seen in the previous fiscal year. While the trade deal opened 92.2% of tariff lines to Indian goods—including key sectors like chemicals, textiles, and engineering—actual sales to these markets have remained low.
Why Exports Are Slowing
The Commerce Department is working with exporters to identify why the agreement has not yet translated into higher trade volumes. Several operational problems have been flagged. A primary challenge is the strict "rules-of-origin" requirement, which forces Indian companies to provide extensive documentation to prove exactly where their goods were manufactured. Additionally, complex certification processes and customs delays at borders have made it difficult for Indian businesses to utilize the tariff concessions offered under the deal.
Investment and Trade Goals
Beyond trade in goods, the partnership includes a major commitment by EFTA nations to invest $100 billion in the Indian economy. The upcoming review aims to streamline regulatory requirements to help both the trade and investment parts of the deal function properly. For now, the main priority for authorities is to clear the operational bottlenecks that prevent goods from reaching these markets efficiently.
Investors and businesses should track the outcomes of this October meeting. The success of the agreement will depend on whether both sides can simplify these certification and customs rules, as this will determine if Indian exporters can better access the European markets as originally planned.