One year on, Swiss-India trade deal favours watches over pharma

Swiss watch exports to India reached CHF 295 million in 2025, giving the new trade pact an immediate and visible winner. The figure rose 35% from 2023, as India’s expanding luxury market absorbed more Swiss-made timepieces and tariffs began to fall.

The EFTA India Trade and Economic Partnership Agreement, known as TEPA, took effect on October 1, 2025. Switzerland joined Liechtenstein, Iceland and Norway in securing preferential access to a market of 1.46 billion people. The agreement has particular significance for Switzerland because India is its most important trading partner within EFTA.

At a September meeting organised by the Geneva Chamber of Commerce and the Swiss Indian Chamber of Commerce, business leaders focused on the watch industry’s five-year path towards zero tariffs. Vincent Subilia, director of the Geneva chamber, called the pact “the most significant trade agreement worldwide”.

The timing gives Swiss companies an advantage over many European competitors. The European Union had no trade agreement with India during the pact’s first year, although EU negotiations concluded in 2026 and a deal could enter force in 2027. Swiss exporters therefore have a limited period to build market share before the competitive landscape changes.

A 22% watch import duty in 2025 is being dismantled in stages, with the first reductions already applied. Swiss watches, chocolate, auto components and dental equipment received tariff cuts on October 1, 2025, followed by another reduction at the start of 2026. Rates will continue to decline according to product category until they reach zero.

The arrangement gives watchmakers a clearer route into India’s premium consumer market. Lower border costs can support retail expansion, distributor relationships and pricing decisions, although the agreement does not remove every commercial challenge. Currency movements, local taxes, logistics and consumer demand will continue to shape the final price paid in India.

Other Swiss industrial sectors received faster treatment. Machinery used to manufacture semiconductors, high purity chemical intermediates for pharmaceutical production, vaccines and aircraft components became duty free when TEPA entered force. Those provisions connect Swiss suppliers to India’s manufacturing and health industries immediately, rather than waiting through a phaseout schedule.

Gold and precious metals, dairy products, finished generics and cars imported from Switzerland remain outside the agreement. Those exclusions limit the pact’s reach in several established trading categories and show why the headline coverage figure requires careful reading.

Pharmaceutical companies gained access for selected inputs, while the intellectual property dispute that delayed the agreement remains active. Switzerland’s pharma industry relies on research medicines protected by patents and other intellectual property rights. India has built a powerful generic drug sector that markets treatments once those patents expire.

That difference shaped 16 years of negotiations and 21 rounds of talks. TEPA covers vaccines and high purity chemical intermediates used in pharmaceutical production, both of which became duty free when the agreement began. Finished generic medicines from Switzerland, however, are excluded and continue to face Indian tariffs.

For Roche and Novartis, the unresolved issue extends beyond customs charges. Stronger protection could affect the commercial returns on medicines developed in Switzerland and the conditions under which innovative treatments reach Indian patients. India’s policymakers and generic manufacturers have their own priorities, including access to affordable medicines and the preservation of established patent rules.

Swiss President Guy Parmelin addressed the unfinished business during his October 2026 visit to New Delhi, where he met President Droupadi Murmu and Prime Minister Narendra Modi. “Everything isn’t perfect,” Parmelin said. The trip included further intellectual property discussions, as well as talks on migration and professional youth exchanges.