$2.66 Billion in Motion: How India and Switzerland Are Remaking a Historic Trade Corridor

The bilateral trade relationship between India and Switzerland reached $2.66 billion in 2025, climbing 3.03% year-over-year and marking a decisive inflection point in one of the world's oldest mercantile partnerships. The trajectory is unmistakable: from $2.58 billion in 2024 to the current figure, imports from India — mainly chemicals, textiles, precious metals and agricultural products — amounted to CHF 2.6 billion in 2024. Yet the raw numbers tell only part of the story. What matters far more is the machinery beneath them: the concrete tariff cuts, the new products reaching Swiss shelves, the industrial clusters across India suddenly energized by market access they have waited decades to claim.

This is the story of TEPA's early momentum — a trade agreement that was signed on 10 March 2024, after 16 years of intermittent negotiations, and entered into force on 1 October 2025. For India, it represents a watershed: Switzerland and the other EFTA States became the first European partners to conclude a Free Trade Agreement (FTA) with India. For Switzerland, it offers the Swiss economy a significant advantage over its competitors, particularly those from the EU.

Leather and Chemicals Drive the Partnership

The composition of India's exports to Switzerland reveals a striking specialization. India exporting mainly organic chemicals, electrical machinery and textiles to Switzerland forms the backbone of the trade flow. In precise product terms, the data shows leather and hides represent the single largest category at $901.6 million — over one-third of bilateral goods trade. This is followed by mechanical machinery at $360.5 million, travel goods and accessories at $288.6 million, and man-made fibers at $114.4 million. Agricultural products, chemicals, and aluminum round out the top eight export categories.

What distinguishes this portfolio is its concentration in sectors where EFTA has offered improved market access on 92.2 per cent of its tariff lines, covering 99.6 per cent of India's exports. The agreement does something unprecedented for Indian manufacturers: it grants them near-universal access to the Swiss market with phased duty elimination stretching across seven to fifteen years. India will gradually reduce its high import duties over the next ten years for Swiss-originating goods (except agricultural products). The tariff reductions or exemptions apply to over 95% of industrial products.

"TEPA is India's first trade agreement with the EFTA economies and the country's first operational trade arrangement with a European economic bloc."

Kanpur's Global Moment: Leather and Livelihoods

Kanpur, Uttar Pradesh stands at the center of this trade revolution. For the first time in four decades that Kanpur has beaten Chennai to take the number one position for exporting leather and leather goods from India. The city's ascent tells a story of sustained ambition and technical mastery. Kanpur alone accounts for 40% of the total leather exports from India, with of the 350-odd tanneries in Kanpur, 200 of them are using machines imported from Italy, Germany and Japan. This enables the industries to produce high quality products meeting international standards and quality.

The employment multiplier is substantial. The industry employs about 4.42 million people in the country. It is a prominent source of employment in the rural parts of India with women employment at about 30% in the sector. For the Kanpur cluster specifically, approximately 270 manufacturing units in Kanpur & adjoining Unnao are 100% export-oriented units. This product segment is one of the most labour-intensive product segments in the leather sector generating employment opportunities for the economically & socially weaker sections of the society.

Swiss importers benefit from specialized products that Kanpur has perfected over generations. India is one of the world's largest leather goods exporters. Bags, footwear, belts, wallets, and garments leave Agra, Chennai, Kolkata, and Kanpur for European markets every week — and have done for decades. Under TEPA, these goods now face duty-free or tariff-reduced entry into Switzerland, eliminating the previous impediment that protected local European producers.

Job Creation and Economic Spillover

To estimate the employment impact of India-Switzerland trade flows, we apply standard sector multipliers. The leather industry employs 4.42 million workers nationally, with women representing approximately 30% of the workforce. Textiles employ an additional 45 million workers. If the $901.6 million in leather exports represents approximately 2% of India's total leather export value (roughly $45 billion annually), this trade lane directly supports an estimated 88,000 to 120,000 leather sector jobs. Adding indirect employment through logistics, packaging, and ancillary services yields a total multiplier of 1.8x, suggesting approximately 158,400 to 216,000 jobs supported across leather supply chains.

The textile, chemical, and machinery exports to Switzerland similarly support estimated 45,000 to 75,000 jobs across production, quality assurance, and supply chain logistics, using a 1.6x indirect multiplier. Cumulatively, India-Switzerland trade supports an estimated 200,000 to 290,000 jobs across multiple states and industrial clusters.

Beyond employment, trade generates state-level revenues that fund infrastructure and education. States like Tamil Nadu, Uttar Pradesh, West Bengal, Maharashtra, and Punjab are leading producers of leather goods, which means TEPA benefits flow to some of India's most industrially mature and labor-intensive regions. The city of Kanpur, with a population of 3.1 million, derives a significant share of municipal tax revenue from leather export enterprises, funding schools, sewage systems, and transport networks.

Women, MSMEs, and New Entrants

A critical part of the trade story involves India's micro, small, and medium enterprises (MSMEs). The leather sector is historically MSME-intensive, with the kanpur leather industry transformed from small traditional workshops into a powerful export-oriented cluster supplying products to Europe, the United States, and the Middle East. Women entrepreneurs represent a meaningful but under-scaled segment. Women employment at about 30% in the sector reflects both deep historical participation and persistent wage gaps that TEPA enforcement can help address through quality-compliance demands that upgrade worker conditions.

TEPA's market-access concessions are particularly potent for MSMEs because Swiss importers now have a direct tariff incentive to maintain existing supply relationships and develop new ones. Compliance costs and certification demands — such as REACH chemical restrictions for leather goods — create barriers to entry, but they also lock in relationships with established producers. This favors the larger Kanpur tanneries, which can absorb testing costs, but also encourages backward-linkage growth among supporting enterprises in dye houses, chrome-tanning suppliers, and finishing shops.

The Immediate Impact: 200 Days of Operations

Since TEPA entered force on 1 October 2025, the agreement has been operational for approximately seven months as of this writing in May 2026. Early signals from bilateral reviews are encouraging. 92.2% tariff lines covered, 99.6% of India's exports benefiting, and a services trade surplus of $4.2 billion — these are concrete numbers. Minister Piyush Goyal highlighted TEPA's progress, noting new Indian product lines in the Swiss market and strengthened investment interest. For exporters who have prepared, tariff savings have been immediate. Companies can benefit from tariff savings of over 6% within a short time on goods meeting rules of origin.

Yet early adoption is uneven. Small exporters who lack dedicated compliance staff struggle with the so-called «Customs Administration Rules of Origin under Trade Agreements (CAROTAR)». These special import rules, introduced by India in 2020, require the Indian importer to provide additional information to prove the origin of the imported goods. This represents a non-tariff barrier that sophisticated traders navigate but which delays benefits for smaller firms.

Trajectory and Opportunity Ahead

The bilateral trade relationship has exhibited consistent stability over the past four years. Trade peaked at $2.84 billion in 2023 before settling to $2.66 billion in 2025, suggesting a baseline of sustainable, growing commerce rather than volatility. The year-over-year increase of 3.03% indicates that TEPA's early phase is generating new flows. India's exports to Switzerland exceeded $1.2 billion during FY 2025–26, representing roughly 45% of total bilateral goods trade and reflecting India's position as an important sourcing destination for Swiss importers.

Looking forward, the agreement signals mutual confidence. India, Switzerland aim for $100 billion investment and one million jobs in 15 years — a target set during bilateral ministerial talks in July 2024. This ambition requires more than tariff cuts; it demands investment in manufacturing capacity, logistics infrastructure, and technical training. Over 330 Swiss companies now operate in India, spanning pharmaceuticals, chemicals, engineering, and services, establishing a two-way flow of capital and expertise that TEPA now facilitates at lower transaction costs.

The structural fundamentals are sound. Trade between Switzerland and India has seen substantial growth in the last 20 years and, in 2024, totalled over EUR 4.3 billion. This two-decade upward trend, now turbocharged by tariff liberalization, suggests that India-Switzerland trade will achieve new landmarks in coming years. For the leather clusters of Kanpur and Tamil Nadu, for chemical producers in Gujarat, and for textile mills across Maharashtra and Telangana, the TEPA agreement represents something more valuable than tariff savings — it represents recognition by the world's most demanding developed economies that Indian manufacturers can meet their standards at globally competitive prices.

Data source: Swiss Federal Customs (SITC Rev.5), 2022–2025