India Inks FTA with 4 European Nations, Anticipates $100 Billion Investments
India has successfully signed a landmark free trade agreement (FTA) with the European Free Trade Association (EFTA), a group comprising Switzerland, Norway, Iceland, and Liechtenstein. The deal, hailed as a 'watershed moment' by Prime Minister Narendra Modi, is expected to stimulate economic growth and job creation in India. According to Commerce Minister Piyush Goyal, the EFTA countries are set to invest approximately $100 billion in India over the next 15 years, generating one million jobs.
Under the FTA, India will eliminate or partially reduce customs tariffs on 95.3% of industrial imports from Switzerland (excluding gold) either immediately or through phased transition periods. Switzerland, in turn, will gain tariff-free access to the Indian market for selected agricultural products after a transition period of up to ten years. The Swiss Federal Council highlighted that the agreement is in line with Swiss agricultural policy and will enhance the competitiveness of Swiss exports to India.
Commerce Minister Goyal emphasized the equitable and balanced nature of the agreement, heralding it as a new era of prosperity and mutual growth among the five nations. The Swiss Federal Council echoed this sentiment, noting that the FTA signing is a significant milestone in Swiss trade policy after 16 years of negotiations.
This agreement positions EFTA as the first European partner to conclude an FTA with India, marking a strategic move towards closer economic ties. Goyal highlighted that the FTA includes an investment commitment for the first time, addressing economic asymmetries between the EFTA region and India.
The FTA aims to enhance market access, with EFTA countries offering access to 92.2% of tariff lines, covering 99.6% of India's exports. This includes tariff concessions on processed agricultural products. India has presented 105 sub-sectors to EFTA and secured commitments from each member state, fostering a comprehensive economic relationship.
The agreement is expected to stimulate Indian services exports, particularly in IT services, business services, education, and audio-visual services. It also includes provisions for Mutual Recognition Agreements in professional services such as nursing, chartered accountancy, and architecture.
The Commerce Ministry emphasized that the FTA provides an opportunity for Indian companies to integrate into EU markets, leveraging Switzerland as a potential base for extending market reach to the EU. It facilitates technology collaboration, granting access to cutting-edge technologies in precision engineering, health sciences, renewable energy, innovation, and research and development.
Notably, improvements have been made to intellectual property rights (IPR), ensuring legal certainty, streamlined patent procedures, and protection of 'Swissness.' The Swiss Federal Council assured that these changes will not restrict access to medicines in India.
Additionally, the agreement includes a comprehensive and legally binding chapter on trade and sustainable development, underscoring the commitment to environmentally responsible practices. The Swiss Federal Council highlighted a chapter promoting investments in India by companies from the EFTA states.
