Swiss chocolates and wines to become cheaper in India under new trade deal

Kochi: Swiss chocolates and wines are set to become more affordable in India following the implementation of a new trade agreement with a group of European countries. India signed the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) – which includes Switzerland, Norway, Iceland, and Liechtenstein – in March 2024.

Key Provisions of the Deal

Under the agreement, India will eliminate tariffs on 80–85% of goods imported from EFTA countries, while Indian exporters will gain duty-free access to 99% of goods in EFTA markets. The deal also includes commitments to invest $100 billion (£74 billion) and create one million direct jobs over the next 15 years. This is India’s first trade agreement where market access is linked directly to investment pledges, signalling a strategic shift in trade negotiations.

Benefits for Consumers and Businesses

For Indian consumers, this means products like Swiss chocolates and wines will become cheaper in the coming months. EFTA countries, in turn, will benefit from India’s zero tariffs on medicines, dyes, textiles, and iron and steel products over the next five to ten years.

India’s imports from EFTA countries in the previous year totalled $32.4 billion, with Switzerland accounting for roughly one-third. Gold imports, which made up $18 billion, will not see any change in tariffs. India’s exports to EFTA stood at $2 billion, mainly industrial goods, which are already duty-free, so incremental benefits from the trade deal are limited.

Strategic Implications

Experts note that the deal’s significance lies not only in tariff reductions but also in perception-building. Ajay Srivastava from the Global Trade Research Initiative said the agreement demonstrates India’s willingness to liberalise trade and may enhance the country’s global trade profile.

The deal comes against the backdrop of steep tariffs imposed by the United States on Indian goods, prompting India to negotiate several trade deals, including a Free Trade Agreement (FTA) with the UK and ongoing talks with the European Union. India’s bilateral trade with the EU reached $135 billion in 2022–23, nearly doubling over the past decade.

Conclusion

The TEPA with EFTA is expected to make European luxury products more accessible to Indian consumers while fostering deeper economic ties, investment, and job creation. It represents a significant step in India’s strategy to strengthen trade relationships and diversify its global economic partnerships.