In a significant move poised to strengthen economic ties, India and the European Free Trade Association (EFTA) group, comprising Iceland, Liechtenstein, Norway, and Switzerland, are on the verge of signing a historic Free Trade Agreement (FTA). Scheduled for Sunday, the agreement marks a pivotal moment for the Narendra Modi government, constituting the third major trade deal since early 2022.
The formal signing ceremony, set to take place in New Delhi, will see the participation of senior officials from both India and the four EFTA countries. Talks surrounding the India-EFTA deal, which initially commenced in January 2008 but remained inactive since 2013, were revitalized last year, paving the way for this landmark agreement.
According to sources familiar with the development, the forthcoming FTA is envisioned as a mutually beneficial arrangement, meticulously addressing the sensitivities of both parties. It holds particular significance as it signifies India’s first FTA with any European entities. While negotiations with the UK and the EU are ongoing, it’s unlikely that any bilateral deals will materialize before India’s upcoming general elections, anticipated to be announced by the Election Commission next week.
The Trade and Economic Partnership Agreement (TEPA) between India and EFTA encompasses a wide array of areas, including trade in goods and services, rules of origin, intellectual property rights (IPR), investment promotion, trade facilitation, and sustainable development. Particularly noteworthy is TEPA’s potential to address India’s significant trade deficit with the EFTA region, which amounted to over $18.57 billion in 2023, predominantly driven by gold imports, notably from Switzerland.
In addressing the issue of gold imports, India may consider implementing a quota-based concessional duty regime for EFTA states, mirroring an existing arrangement with the UAE. Key imports from the four EFTA nations include gold, silver, coal, pharmaceuticals, and various machinery, while India exports chemicals, iron and steel, precious stones, and textiles, among other goods.
This impending FTA underscores India’s commitment to fostering robust economic partnerships and enhancing trade relations on a global scale. As the signing ceremony approaches, anticipation mounts regarding the transformative impact of this agreement on the economic landscapes of both India and the EFTA nations.
Sources By Agencies
