Indian Prime Minister Narendra Modi (R) walks with Swiss President Guy Parmelin (L) ahead of their meeting on various topics, including Swiss-Indian trade and intellectual property. New Delhi, India, October 5, 2026.
Keystone
In October 2025, Switzerland, as a member state of EFTA, entered into what was billed as a historic free trade deal with India. One year on, Swiss pharma still wants more intellectual property protection.
The promise of zero tariffs on Swiss watches in India within the next five years fuelled high spirits at a mid-September gathering of Indian and Swiss entrepreneurs hosted by the Geneva Chamber of Commerce (CCIG). In 2025, Switzerland exported CHF295 million ($354 million) worth of watches to India, a figure up 35% since 2023. Switzerland paid 22% import duties on these last yearExternal link.
The event co-organised with the Swiss-Indian chamber of commerce (SICC) came ahead of the one-year anniversary of the trade deal between India and the European Free Trade Association (EFTA). Switzerland is India’s most important trading partner among the group that also includes Liechtenstein, Iceland and Norway.
“This is the most significant trade agreement worldwide”, said Vincent Subilia, the director of the CCIG.
TEPA came into force on October 1, 2025, after 16 years and 21 rounds of negotiations. Finalising the text was particularly arduous mainly due to disagreements between Switzerland and India over intellectual property rights. While Switzerland’s pharma industry is known for its innovative medicines, protected by strict intellectual property rights, India’s drug industry thrives on generic drugs that are marketed once those patents expire.
One of the biggest achievements for EFTA members was signing a deal with India before any other individual member states of the European Union, or the EU itself, and gaining preferential access to 1.46 billion inhabitants. The agreement covers key industries, such as machinery, watches and vaccine production, but leaves questions around pharmaceuticals unresolved.
In early October, on a trip to the Indian capital New Delhi to meet President Droupadi Murmu and Prime Minister Narendra Modi, Guy Parmelin, who holds the rotating Swiss presidency this year, commenting on the deal declared “everything isn’t perfect”. The visit included negotiations on migration and professional youth exchanges. A bilateral agreement to protect Swiss company dividends and further discussions on intellectual property were also on the agenda. Swiss pharma giants Roche and Novartis took part in the trip.
What’s in the free trade agreement?
According to the agreement, 94.7% of Swiss exports will benefit from a reduction in tariffs, with industries either immediately becoming duty free, or gradually over the next five, seven or ten years. Gold and precious metals, dairy products, finished generics and cars coming into India from Switzerland are excluded from the agreement and will continue to be taxed.
Exports of machinery to manufacture semiconductors, high-purity chemical intermediates that are used in pharmaceutical production, vaccines, and aircraft components have all become duty free since the entry into force of the agreement.
For industries including Swiss watches, chocolate, auto components, and dental equipment, tariffs have already been reduced twice: once on October 1, 2025, and once at the start of 2026. These tariffs will continue to be lowered gradually (depending on the category), until they reach zero.
How have Swiss companies benefitted so far?
Swiss goods with an immediate reduction of customs duties have had a head start compared to European Union competitors, because to date the bloc has no trade deal with India. But EU negotiations were finalised this year and an agreement may come into force in 2027. This will narrow the gap between European companies and Swiss ones.
According to Philippe Reich, chairman of the SICC and an India specialist at Baker McKenzie, Switzerland’s multinational corporations have already expanded but small- and medium-sized enterprises (SMEs) will also benefit in the long run.
Swiss-Swedish automation company ABB announced a $75 million (CHF62.3 million) investment to expand its manufacturing and R&D capacity in 2026, and Swiss engineering firm Sulzer opened a new hub in the Indian city of Pune a month after TEPA’s launch. These investments form part of a financial commitment that is spelled out in the agreement. EFTA signatories have committed to promoting their private enterprises and institutional funds to invest $100 billion in India over the next 15 years. According to the SICC, investments announced since TEPA have reached $29 billion in Switzerland alone.
Global geopolitical shifts, including tensions between the United States and China, have been decisive for SMEs that rely on foreign supply chains. Many have shifted investments from China to India to diversify risks.
“These companies may not necessarily leave China, but they are shifting their investments from China to India. India has become more important,” said Reich.
Switzerland Global Enterprise (S-GE), the country’s official organisation for export and investment promotion, has said it has seen signs of increased interest from Swiss companies in the Indian market but definitive conclusions will come once they finalise their analysis of Switzerland’s economic footprint in India.
Beyond larger and more experienced consultancies, the agreement has also led to the flourishing of smaller offices. In May 2026, entrepreneur Ruby Greber set up India Swiss Enterprise in Geneva, to cater to companies looking into expanding in India.
“We help Swiss companies to establish their business in India and vice versa,” Greber explained. The consultancy is still in discussion with potential clients.
What about Swiss pharma?
While part of the pharma industry was covered by the initial deal, others such as generics were excluded. Intellectual property rights remain a key touchpoint.
According to S-GE, no new pharmaceutical companies have moved to India following the agreement. Following the agreement, Roche announced it would invest about CHF1.7 billion in India. This amount will support its existing operations and the expansion of its hub in Hyderabad, in the state of Telangana in southern India, by 2030. But the company says it hasn’t yet observed tangible benefits for its imported drugs.
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Most of the company’s drugs, which range from oncology to antivirals, are imported into India as finished products and currently taxed at around 10%. Some drugs targeting rare diseases and cancer treatments have already become tax-free, but tariffs on most finished drugs will drop by 1% every year over a decade. Generics, insulin and antibiotics are excluded from the free-trade agreement and will continue to be taxed. The agreement will take longer to impact the price of these drugs.
Reich comments the real issue at stake for pharmaceutical companies isn’t so much tariffs but enhanced intellectual property rights protection, which is essential for greater pharma innovator investments in India.
India refused to grant pharmaceutical firms data exclusivity, meaning generic drugs are automatically approved based on the clinical trial data of the original drugs. The country also rejected broader intellectual property rights through which companies can extend patents beyond 20 years and conserve market exclusivity.
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Previously stalled bilateral talks on intellectual property rights between Switzerland and India picked up again in 2025, following the conclusion of the trade agreement. These talks continued during Parmelin’s visit and focused on patents and data protection during clinical trials. A spokesperson for Parmelin confirmed the exchanges were constructive and were due to continue.
“I’m absolutely convinced we will see pharmaceutical R&D in India but this is a work in progress. Companies will first need to feel comfortable about the regulatory environment from an intellectual property perspective to really go in a big way for it. But I think that’s a matter of time,” Reich said. He estimated a five-year timeline for pharmaceutical companies to seriously consider India as a research and production base.
Edited by Virginie Mangin/gw
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