Reductions in customs duties have been proposed by the Indian government for 82.7% of its tariff lines, which account for 95.3% of exports under the European Free Trade Association (EFTA). This will lower the cost of Swiss cheese, chocolate, wine, watches, and other goods for Indian customers.
Furthermore, in an effort to increase the amount of services it exports to EFTA nations, India has granted concessions in 105 subsectors, including accounting, healthcare, and IT.
India-EFTA trade deal explained in points
• EFTA countries will expand their operations in India as a unique feature of the India-EFTA trade deal is EFTA’s commitment to invest USD 100 billion in India over the next 15 years.
• These investments will target manufacturing sectors such as chemicals, pharmaceuticals, machinery, and food processing, as well as service exports like IT and accounting, and infrastructure.
• The trade deal is expected to enhance India’s manufacturing and services infrastructure, spur innovation, create jobs, and upskill the workforce. It aims to boost domestic manufacturing in sectors like infrastructure, connectivity, machinery, pharmaceuticals, chemicals, transport, logistics, banking, financial services, and insurance.
• The agreement provides Indian companies a gateway to the EU market through Switzerland, which exports over 40 per cent of its global services to the EU.
• The trade deal will strengthen India’s trade relations with Europe by improving market access for both India and EFTA members.
• With the FTA, EFTA gains access to India’s growing market, estimated to become the world’s fifth-largest consumer market by 2025.
• The deal offers India access to Europe, particularly for manufacturers and exporters in food processing, pharmaceuticals, and organic chemicals, with EFTA offering 92.2 per cent of its tariff lines to Indian exporters.
• The agreement prioritises tariff reductions and simplification of trade procedures, targeting high-value items like fish, advanced chemicals, pharmaceuticals, machinery, and Swiss chocolate.
• EFTA countries can now export processed foods, electrical machinery, and engineering items to India at low tariffs, benefiting a market of 1.4 billion people.
On March 10, India and the European Free Trade Association (EFTA) signed a free trade agreement, capping 15 years and 21 rounds of negotiations. India has obtained commitments in 128 from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland as part of the agreement, which has opened 105 subsectors to EFTA.
EFTA, an intergovernmental organization with members Iceland, Liechtenstein, Norway, and Switzerland, was founded in 1960 with the goal of advancing free trade and economic cooperation throughout Europe.
The EFTA countries, with a combined population of 13 million, rank tenth in the world for merchandise trade and eighth for commercial services.
