[1st October 2026] The Hindu OpED: The India-EFTA partnership, one plus one equals three

Mentor’s Comment

TEPA is publicised through tariff coverage, but its test is whether an investment and jobs pledge converts into commercial projects. Iceland’s contribution is knowledge, and India’s CCUS effort is at the pre-commercial stage where that knowledge is most useful. The ambition is $100 billion and one million jobs. The missing precondition is evidence of conversion, since a drying facility at Tapri and a memorandum at Raigad are not investment flows. The partnership also shifts the constraint to India. Licensing, storage assessment and monitoring require domestic institutions able to absorb the technology. The article is an ambassador’s advocacy piece, so its claims need to be read against outcome data.

Why in the News

The Trade and Economic Partnership Agreement (TEPA) between India and the four European Free Trade Association (EFTA) states, Iceland, Liechtenstein, Norway and Switzerland, entered into force on 1 October 2025. A year on, the real test is the industrial and technological partnership it enables, not tariff cuts.

What is TEPA, and what sets it apart?

1. What it is: TEPA is a trade deal in which each side cuts customs duties on the other’s goods, like a standing discount between regular partners.
2. EFTA’s offer: EFTA states cut duties on 92.2% of their tariff lines (product categories), covering 99.6% of the value of India’s exports to them.
3. India’s offer: India grants concessions on 82.7% of its tariff lines, covering 95.3% of EFTA’s exports, among India’s most ambitious openings to developed economies.
4. Investment and jobs chapter: TEPA is India’s first trade agreement with a dedicated chapter on investment and job creation. EFTA states aim to invest $100 billion over 15 years.
5. The takeaway: By tying market access to investment and jobs, TEPA is built for lasting industrial partnerships, not only cheaper trade.

Where can Iceland’s experience serve India’s priorities?

1. Geothermal direct use: Iceland uses low and medium temperature ground heat directly, not to make power. India’s Himalayan geothermal belt can do the same:
   • at Tapri, Kinnaur district, the Indian-Icelandic venture Geotropy dries fruit, so apple growers need not sell at low harvest-time prices;
   • a geothermal cooling facility at the site is due by the end of the year;
   • frontier posts reliant on fuel convoys gain energy security independent of roads.
2. Carbon capture, utilisation and storage (CCUS): CCUS traps carbon dioxide from industry and reuses or buries it. India is at a pre-commercial stage:
   • the Department of Science and Technology (DST) published India’s first CCUS research road map in December 2025, for the 2070 net-zero goal;
   • Oil and Natural Gas Corporation (ONGC), NTPC Limited and Indian Oil Corporation Limited are running pilots and feasibility studies;
   • Iceland’s CarbFix injects dissolved carbon dioxide into basalt, where over 95% turns to stone within two years. India’s Deccan Trap basalts are similar;
   • Carbon Iceland, JSW Steel and Bharatia signed a memorandum on an e-methanol project in Raigad, turning steel emissions into fuel with green hydrogen;
   • the gain lies in technology licensing and co-developed projects, not equipment exports.
3. Fisheries processing: Icelandic firms plan to process North Atlantic catch in India under TEPA. Iceland uses about 90% of each cod, far more than most fishing nations.

How does Iceland link India to the Arctic and to Europe?

1. Arctic Council: Iceland is a founding member of the Arctic Council, the forum of the eight Arctic States. India has been an Observer since 2013.
2. India’s Arctic engagement: India published its Arctic Policy in 2022 and runs the Himadri station in Svalbard. Iceland offers it a direct bilateral channel into Arctic research.
3. Complement to the EU deal: TEPA complements, not rivals, the European Union (EU)-India Free Trade Agreement (FTA). Together the two pacts give India more than either alone, “one plus one equalling three“.

Challenges

1. Investment promise unproven: Turning the investment pledge into ground-level projects remains a bureaucratic challenge.
2. Standards barriers: Strict European sanitary and phytosanitary (SPS) rules on food safety and plant health hold back Indian farm exports.
3. Investor caution: Norwegian pension funds have hesitated to invest in India over perceived regulatory unpredictability.
4. Thin logistics links: Few direct shipping and air-cargo routes raise freight costs.

Way Forward

1. Investment tracker: The Ministry of Commerce and Industry should publish yearly EFTA investment and jobs data.
2. Pension fund outreach: India should court Norway’s Government Pension Fund Global for Indian green bonds.
3. Geothermal mapping: The Ministry of New and Renewable Energy should map Himalayan direct-use sites on the Tapri model.
4. Joint storage pilots: DST and public sector firms should run basalt storage pilots with Icelandic partners.

Conclusion

TEPA’s worth will be judged by the plants and jobs it seeds, not by tariff schedules. Whether its investment chapter turns geothermal, carbon capture and fisheries ideas into bankable ventures will decide if the European pacts truly add up.

Key numbers

1. Jobs target: one million direct jobs to be facilitated under TEPA.
2. CCUS potential: about 750 million tonnes of carbon dioxide a year by 2050 (NITI Aayog, 2022).
3. CCUS Budget outlay: Rs 20,000 crore over five years (Union Budget, February).
4. Raigad e-methanol project: 3,00,000 tonnes a year.
5. First carbon-to-fuel plant: George Olah plant, Svartsengi, Iceland, making methanol since 2011-12.