"India emerges as one of the most attractive markets for Swiss companies"
The free trade agreement concluded with India in March 2024 gives Swiss SMEs a competitive edge over their European and British counterparts. However, success depends on anticipating potential pitfalls, as explained by Deepti Sharma, Cluster Head India and Southeast Asia at Switzerland Global Enterprise.
The Trade and Economic Partnership Agreement (TEPA) between EFTA (of which Switzerland is a member) and India entered into force on 1 October 2025. Customs duties have been eliminated or reduced on numerous goods, generating estimated savings of up to around CHF 167 million for Swiss exporters. At a time when many companies are seeking to secure their supply chains and diversify their markets, this agreement with the world's most populous country and fourth-largest economy, growing at an annual rate of between 6% and 7%, represents significant support for Swiss SMEs. However, establishing operations in India requires an understanding of a highly fragmented market, sometimes complex compliance requirements, and the need to build strong partnerships, explains Deepti Sharma, Cluster Head India and Southeast Asia at Switzerland Global Enterprise.
What initial conclusions can be drawn from TEPA, two years after its signing and nine months after it entered into force?
Deepti Sharma: Since the agreement was signed, we have seen a clear increase in interest in the Indian market. India is now among the most attractive foreign markets for Swiss companies. In 2024 and 2025, the country ranked among the top three global markets by volume of enquiries received by Switzerland Global Enterprise (S-GE), whereas previously it was among the top ten. TEPA doesn’t replace a well-defined market-entry plan – it amplifies the advantages for companies that come prepared.
Which sectors are benefiting most from this agreement?
Sharma: Analyses conducted by S-GE show that Swiss companies operating in machinery, electrical equipment and metals (MEM), Mobility, Medtech, Pharma, Chemicals, Watches are well positioned to benefit from the new framework conditions. Other high-value-added sectors, such as semiconductors, electronics, photonics and space technologies, are growing at a fast pace in India, and Swiss companies in these sectors also stand to gain by exploring opportunities in the market.
What are the main pitfalls for a Swiss company establishing operations in India?
Sharma: Some companies view India as a single, homogeneous market. In reality, it is a vast country with almost 1.5 billion inhabitants, made up of several distinct regional markets. The regulatory framework, business practices and customer expectations can vary considerably from one region to another. In addition, companies often underestimate the complexity of compliance procedures, which involve not only national registration requirements for products and services but, in some cases, additional obligations at the regional level. Another important topic is the choice of market entry model: a distribution partner, a joint venture with an Indian company, or a wholly owned subsidiary. Recruitment and nurturing of top talent can also be time consuming for a Swiss company seeking to expand into India. This is why careful planning is essential, for example, by seeking support from organizations specializing in international business development, such as S-GE.
What contractual risks require particular attention?
Sharma: Payment terms and exit clauses in the event of contract termination should not be overlooked. We also recommend anticipating intellectual property protection issues, particularly in joint venture and partnership agreements. Distribution agreements with local partners should clearly define the territories covered and any non-compete provisions. The contracting parties should also discuss at an early stage which jurisdiction will have authority in the event of disputes. For example, it is possible to register the contract in Switzerland or to use a third-country jurisdiction. However, this decision must be made on a case-by-case basis, depending on each company's needs and objectives.
How can contracts be enforced in the event of a dispute? Can companies rely on local authorities?
Sharma: The best protection remains in the selection of a reliable partner and practical understanding of the market. To this end, companies can turn to S-GE and the Swiss Business Hub India for support in assessing potential partners. In the event of regulatrory and operational challenges, such as payment delays, companies can seek assistance from the Swiss Embassy in New Delhi and, where necessary, from the State Secretariat for Economic Affairs (SECO). In practice, however, many situations are resolved through an in-person visit or with the support of a local partner. The Indian market remains strongly relationship driven. In our experience, recourse to arbitration or litigation remains rare.
India has also signed free trade agreements with the EU and the United Kingdom, which will enter into force in the coming months. What competitive advantage remains for EFTA countries, including Switzerland?
Sharma: Swiss companies already benefit from the elimination of customs duties on 39% of tariff lines, giving them a head start in gaining market share. Some niche products remain subject to customs duties, but with substantial reductions. Swiss wines, for example, are now taxed at 75%, compared with 150% previously. For latest updates and to gain access to relevant networks, companies can benefit from staying connected to the ecosystem of the Swiss-Indian Chamber of Commerce, Industry Associations, and Cantonal Chambers of Commerce.
