New Delhi: India and the European Free Trade Association (EFTA) bloc comprising Iceland, Liechtenstein, Norway and Switzerland on Sunday signed a free trade agreement (FTA) that is expected to create better integrated and more resilient supply chains and new opportunities for businesses and individuals on both sides.
This was the third major trade deal finalised by the Modi government since early 2022 when New Delhi signed separate bilateral agreements with the United Arab Emirates (UAE) and Australia. India is also negotiating big-ticket trade deals with the European Union and the UK, though those are unlikely to be finalised in the near future.
The India- EFTA Trade and Economic Partnership Agreement (TEPA) was signed by commerce minister Piyush Goyal, Swiss federal councillor and head of the federal department of economic affairs Guy Parmelin, Iceland’s foreign minister Bjarni Benediktsson, Liechtenstein’s foreign minister Dominique Hasler and Norway’s trade minister Jan Christian Vestre.
People familiar with the matter said the EFTA states have committed to invest $100 billion in India over a period of 15 years. The trade deal also covers gender and environment aspects, they said on condition of anonymity.
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{{/usCountry}}Prime Minister Narendra Modi said in a statement that the signing of the trade deal marks “a new turn and a watershed moment” in the relationship between India and the EFTA states. He described the FTA as an “innovative, well-balanced trade deal that reflects our respective developmental aspirations”.
“One of the most pioneering free trade agreements ever concluded between our countries, TEPA emphasises our steadfast commitment to shared prosperity and our drive to cultivate a stronger, more inclusive partnership between India and EFTA, furthering the aspirations of our people,” Modi said.
The global leadership of the EFTA states in innovation and research and development in areas such as digital trade, banking and financial services, transport and logistics, industrial machinery, biotechnology and pharmaceuticals will open up new doors of collaboration, he said.
After inking the agreement, Goyal said it reflects a “new resurgent India, full of self-confidence”.
Besides leading to better integrated and more resilient supply chains and new opportunities for businesses and individuals, the TEPA is expected to lead to increased trade and investment flows and job creation.
Speaking on behalf of the EFTA states at the signing ceremony, Swiss federal councillor Guy Parmelin said the four countries will gain market access to a major growth market. “Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs,” he said.
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The TEPA enhances market access and simplifies customs procedures, making it easier for Indian and EFTA businesses to expand operations in the respective markets. The agreement also aims to facilitate and promote investment opportunities between the countries.
Talks on the India-EFTA trade deal began in January 2008 but remained dormant after 2013 until the negotiations were revived last year.
According to government data, India’s exports to the EFTA region during January-December 2023 were worth $1.87 billion, while its imports from the bloc of countries that aren’t members of the European Union (EU) were in excess of $20.45 billion, with Switzerland’s share alone pegged at $19,65 billion due to gold purchases.
India’s key imports from the four countries are gold ($20.7 billion in 2021-22), silver, coal, pharmaceuticals, vegetable oil, dairy machinery, medical items, crude and scientific equipment. It exports chemicals, iron and steel, gold, precious stones, yarns, sports goods, glassware and bulk drugs to these nations.