Context: The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA)—Iceland, Liechtenstein, Norway and Switzerland—entered into force on 1 October 2025.
- Beyond tariff reduction, TEPA aims to deepen investment, employment, technology transfer and sectoral partnerships between India and EFTA countries.
TEPA: Key Features
- EFTA market access: Concessions on 92.2% of tariff lines, covering 99.6% of the value of India’s exports to EFTA.
- India’s market access: Concessions on 82.7% of tariff lines, covering 95.3% of the value of EFTA exports to India.
- Investment commitment: EFTA states aim to facilitate $100 billion investment in India over 15 years and 1 million direct jobs.
- Significance: TEPA was the first Indian trade agreement with a dedicated chapter on investment and job creation, making it broader than a conventional tariff-reduction agreement.
Iceland’s Role: Partnership Beyond Scale
- Iceland’s contribution is focused less on market size and more on specialised technological and sectoral expertise, particularly in geothermal energy, carbon management and fisheries.
1. Geothermal Energy and Energy Security
- Iceland has extensive experience in the direct use of geothermal heat for space heating, food drying, greenhouses and other applications, apart from electricity generation.
- This experience is relevant to India’s Himalayan geothermal belt, particularly for remote and high-altitude communities.
- At Tapri, Kinnaur (Himachal Pradesh), an Indian-Icelandic venture, Geotropy, is using geothermal heat for fruit drying, helping apple growers process produce and avoid distress sales immediately after harvest.
- A geothermal cooling facility at the same site is also being developed, enabling better storage and timing of agricultural sales.
- Geothermal energy could also provide energy security to remote frontier installations, reducing dependence on fuel transported through vulnerable mountain supply routes.
2. Carbon Capture, Utilisation and Storage (CCUS)
- NITI Aayog (2022) estimated that India could potentially capture around 750 million tonnes of CO₂ annually by 2050.
- The Department of Science and Technology (DST) has supported CCUS research and published India’s first dedicated CCUS R&D roadmap in December 2025, aligned with the 2070 net-zero target.
- The Union Budget subsequently provided ₹20,000 crore over five years to scale CCUS technologies in sectors such as power, steel, cement, refining and chemicals.
- ONGC, NTPC and Indian Oil are undertaking feasibility studies, pilot projects and subsurface assessments.
Icelandic Expertise: CarbFix
- Iceland’s CarbFix technology dissolves CO₂ in water and injects it into basalt, where it mineralises into stable carbonates.
- CarbFix has demonstrated that more than 95% of injected CO₂ can turn into rock within two years under suitable conditions.
- India’s Deccan Trap basalts have geological similarities with Icelandic volcanic formations, creating potential for technology cooperation in geological carbon storage.
3. Carbon Utilisation and E-Fuels
- Iceland hosted the George Olah plant at Svartsengi, developed by Carbon Recycling International, one of the earliest industrial-scale facilities to convert captured CO₂ into methanol.
- Such technology can convert industrial emissions into useful products when combined with green hydrogen.
- Carbon Iceland, along with JSW Steel and Bharatia, is exploring a 3 lakh-tonne-per-year e-methanol project in Raigad, Maharashtra, using steel-sector emissions and green hydrogen.
- Cooperation can therefore extend beyond equipment imports to technology licensing, storage assessment, monitoring, verification and joint project development.
4. Fisheries and Blue-Economy Cooperation
- Iceland has developed expertise in sustainable fisheries management, seafood quality, cold-chain logistics and value-added processing.
- Icelandic companies are exploring further processing of North Atlantic fish in India, potentially generating employment and technology transfer under TEPA.
- Iceland follows a high fish-resource utilisation model, using around 90% of landed cod, compared with roughly 40–60% utilisation in many fishing countries.
- Fish skin, liver and bones can be converted into medical products, oils and animal feed, demonstrating the potential of a circular blue economy.
- For India, greater utilisation of existing catches could increase value addition, employment and exports without increasing fishing pressure.
India–Iceland Cooperation in the Arctic
- Iceland is one of the eight Arctic States and a founding member of the Arctic Council.
- India has been an Arctic Council Observer since 2013 and released its Arctic Policy in 2022.
- India operates the Himadri research station at Svalbard, Norway, supporting Arctic scientific research.
- Iceland provides India with a bilateral channel for Arctic governance and research, complementing India's participation through the Arctic Council.
- Cooperation therefore links energy, climate change, scientific research, trade and Arctic stewardship.
European Free Trade Association (EFTA)
- EFTA is a regional intergovernmental organisation comprising Iceland, Liechtenstein, Norway and Switzerland.
- It is separate from the European Union (EU) and should not be confused with the European Economic Area (EEA).
- EFTA promotes free trade and economic integration among its members and negotiates trade agreements with non-EU countries.
CCUS
- Carbon Capture, Utilisation and Storage involves capturing CO₂ emissions from industrial sources or the atmosphere.
- Utilisation: Converts captured CO₂ into fuels, chemicals or other products.
- Storage: Permanently stores CO₂, including through geological mineralisation.
- It is particularly relevant for hard-to-abate sectors such as cement, steel, refining and chemicals.
Broader Significance of TEPA
- TEPA represents a shift from conventional tariff-focused FTAs towards investment, technology and employment-oriented economic partnerships.
- The India–EFTA relationship can complement the broader India–EU trade relationship by providing an already operational model for cooperation in investment, technology and sustainable development.
- The partnership illustrates how countries with very different economic scales can create value through specialised knowledge, technology transfer and complementary capabilities.
