India & EFTA Sign Pact, Target $100B in 15 Years

India and four European countries signed a trade and economic partnership agreement (TEPA) on Sunday that will create one million jobs in the South Asian country in 15 years, Indian Trade Minister Piyush Goyal said .

The four European countries are Switzerland, Norway, Iceland and Liechtenstein, which form the European Free Trade Association (EFTA) bloc . The EFTA bloc is not part of the European Union (EU) and is an inter-governmental organization set up in 1960 for the promotion and intensification of free trade.

“It is the first time in history of the world that we are inking an agreement with a binding commitment to invest $100 billion in India from the EFTA countries,” Goyal said at the signing ceremony . “Investor confidence in India is at an all-time high.”

The TEPA is the result of nearly 15 years of hard work and tremendous effort, and symbolizes the shared commitment to open, fair and equitable trade, as well as to generate growth and employment for the youth, Goyal said.

The TEPA will benefit both India and the EFTA countries in various sectors such as digital trade, banking and financial services, transport and logistics, industrial machinery, biotechnology, pharmaceuticals, chemicals, food processing and clean energy .

India will extend all possible support to EFTA countries and facilitate industry and businesses not only to achieve the committed targets but also to go beyond them, Prime Minister Narendra Modi said.

The EFTA countries will in return get easier access for processed food and beverages, electrical machinery, and to a potential market of 1.4 billion people in one of the world’s fastest-growing major economies .

India offers “immense opportunity for trade and investment,” Swiss Economy Minister Guy Parmelin said at the ceremony, adding that the South Asian nation would gain access to technology through the deal. The agreement will also benefit the pharmaceutical and medical devices industry of the bloc.

Indian exporters will get liberalized access for their rice and other products to these European nations while high-end Swiss products such as watches, chocolates, biscuits and clocks will become cheaper in India in a phased manner as India will phase out customs duties under the TEPA on these goods over a period of time .

The services sector will also benefit from the deal and Indian professionals will be able to move more smoothly under the arrangement. The EFTA bloc has committed to market access and non-discriminatory treatment for Indian services including in the audio-visual, accounting and auditing, legal and computer-related sectors under the TEPA. India has offered market access and non-discriminatory treatment to the accounting, health, computer, banking and insurance services of the bloc.

Goyal said the TEPA is India’s most modern agreement till date, dealing with chapters including labor, environment and gender. Modi’s government has accelerated talks with major trading partners to take advantage of the changing global world order. It is also in discussions with the UK, EU and Australia for free trade pacts to boost local manufacturing and create jobs. Negotiations with the UK are in the final stages.

Among the EFTA bloc, Switzerland is India’s largest commercial partner and bilateral trade stood at $17.14 billion in 2022-23 fiscal year, out of $18.66 billion with the whole group.

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