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Business News/ News / India/  India, EFTA sign free trade deal
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India, EFTA sign free trade deal

Iceland, Liechtenstein, Norway and Switzerland have offered duty-free market access for India's animal products, fish, processed food, and vegetable oils

The EFTA nations have proposed a $100 billion investment in India by their companies over 15 years. Image: PixabayPremium
The EFTA nations have proposed a $100 billion investment in India by their companies over 15 years. Image: Pixabay

New Delhi: India and the four-nation European Free Trade Association (EFTA) on Sunday signed a free trade deal to integrate and strengthen supply chains, attract investments and generate new business opportunities. The EFTA comprises Iceland, Liechtenstein, Norway and Switzerland.

While EFTA will lift duties on Indian rice exports except those used for animal consumption, India will remove duties on Swiss chocolates and watches over seven years.

The EFTA has also made a binding commitment to invest $100 billion in India and create one million direct jobs in the next 15 years.

The Trade and Economic Partnership Agreement (TEPA) with EFTA is the third major trade deal finalized by the Modi government since early 2022. India has already signed separate bilateral agreements with the United Arab Emirates (UAE) and Australia.

The EFTA is offering 92.2% of its tariff lines for India’s export. With this, India will get 100% market access for its non-agri products.

“Under the treaty, India has opened 82.7% of its tariff lines, which covers 95.3% of EFTA exports. However, the effective duty on gold remains unchanged, even though more than 80% of EFTA imports to India are gold," it added.

Sensitivity related to production-linked incentives (PLI) schemes in sectors such as pharmaceuticals, medical devices, and processed food were also considered while extending offers. Sectors such as dairy, soya, coal, and sensitive agricultural products are not covered by the TEPA.

The EFTA nations have also allowed Ayush services under the treaty.

The 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.

Congratulating the negotiators and signatories, Prime Minister Narendra Modi said agreement is a “watershed moment" and symbolized a shared commitment to open, fair and equitable trade.

“The well-balanced trade deal reflects the respective developmental aspirations of both sides," Modi added.

“India will extend all possible support to these countries and facilitate industry and businesses, not only to achieve the committed targets but also to go beyond them, he added.

Commerce minister Goyal, added that while the agreement will boost the Make in India campaign, and provide opportunities to the Indian workforce, it will provide a window for Indian exporters to access large European and global markets.

“TEPA is a modern and ambitious trade agreement. For the first time in the history of FTAs, the binding commitment of $100 billion investment and one million direct jobs in the next 15 years has been given," Goyal added.

“Today is a day for the history books because what we have created today is tremendous. The Norwegian Sovereignty Fund has already invested $17 billion in India. So that comes on top of the $100 billion we are talking about," Norway’s minister of trade and industry, Jan Christian Vestre said.

“We have during the last year worked intensely and in a result-oriented manner to achieve this. Norwegian exports to India today meet high tariff barriers of up to 40% on certain goods. With the new arrangement, we have secured zero tariffs on almost all Norwegian exports to India. This is a breakthrough that can mean a lot for workplaces throughout Norway," he added.

India is also negotiating trade deals with the European Union the UK, and several other smaller countries like Oman and Peru, though those are unlikely to be finalised soon.

Mint had on 7 March reported the India-EFTA deal would be signed on 10 March after the draft agreement was taken up for approval by the Union Cabinet.

Talks on the India-EFTA trade deal began in January 2008, but were stalled for long.

According to government data, India’s exports to the EFTA region during January-December 2023 were worth $1.87 billion, while its imports were more than $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.

Switzerland is India’s largest EFTA trading partner, followed by Norway.

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Published: 10 Mar 2024, 11:54 AM IST
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