On Sunday India and the four-nation European bloc EFTA signed a free trade agreement where New Delhi has received an investment commitment of $100 billion in the next 15 years.
Commerce and Industry Minister Piyush Goyal described the signing as a watershed moment, as it is India’s first latest trade pact with a bloc having developed countries.
He said that for the first time in a trade agreement, for the next 15 years, EFTA had agreed to invest $ 100 billion.
It would take around a year, for the agreement to come into force.
Switzerland, Norway, Iceland and Liechtenstein are members of the European Free Trade Association (EFTA)
There are 14 chapters in the agreement, including trade in goods, rules of origin, intellectual property rights (IPRs), trade in services, investment promotion and cooperation, government procurement, technical barriers to trade, and trade facilitation.
EFTA countries gain market access to a major growth market. Our companies try to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will finally translate into an increase in good jobs. All in all, the TEPA will let us make better use of our economic potential and give more opportunities for both EFTA States and India, says Federal Councilor Guy Parmelin.
Under free trade contracts, two trading partners significantly remove or lessen customs duties on the maximum number of goods traded between them, also easing norms to encourage trade in services and investments.
Since January 2008, EFTA and India have been negotiating the contract, officially dubbed the Trade and Economic Partnership Agreement (TEPA). Till November 2013, thirteen rounds of discussions were held before negotiations were put on hold.
In October 2023, both sides resumed the negotiations and concluded it in a fast-track mode.
EFTA countries are not part of the European Union (EU). It is an inter-governmental organization for the promotion and intensification of free trade. It originated as an alternative for states that did not wish to join the European community.
India is separately negotiating a comprehensive free trade agreement with the EU, the 27-nation bloc.
Previously India had used a method of fast-tracking or expediting FTA negotiations effectively with Australia and UAE.
In 2022/23 India-EFTA two-way trade was $ 18.65 billion compared to $ 27.23 billion in 2021-22. The trade shortage was $ 14.8 billion in the last fiscal.
The largest trading partner of India is Switzerland, which is followed by Norway in the bloc.
