India has inked a historic free trade pact with a consortium of European nations, including Switzerland, Norway, Iceland, and Liechtenstein, marking a significant milestone in the country’s trade relations. The comprehensive Trade and Investment Agreement, signed after 21 rounds of negotiations spanning 16 years, promises to reshape trade dynamics and bolster investment inflows.
Under the terms of the agreement, India is set to receive a staggering $100 billion in investments over the next 15 years, while committing to reducing tariffs, paving the way for enhanced trade collaboration between the participating nations. The pact is expected to facilitate the export of key Indian sectors such as pharmaceuticals, garments, chemicals, and machinery, while also attracting investments in vital industries like automobiles, food processing, railways, and the financial sector.
With India emerging as the fifth-largest trading partner of the European Free Trade Association (EFTA), after prominent global entities like the European Union, the United States, Britain, and China, bilateral trade between India and the EFTA touched $25 billion in 2023. While India’s exports to the EFTA amounted to $2.8 billion, imports stood at approximately $22 billion during the same period.
The agreement is poised to provide a significant boost to Swiss manufacturers, particularly in sectors such as machinery, luxury items, and transportation. Furthermore, it offers EFTA nations access to India’s vast consumer base, enabling exports of processed food and beverages, electrical machinery, and engineering products at reduced tariffs.
In the realm of pharmaceuticals and medical devices, the pact holds promising prospects for collaboration and growth within the EFTA bloc. Moreover, India anticipates strengthening its trade ties with Switzerland, the largest partner within the EFTA, opening avenues for increased bilateral trade and investment.
Despite the landmark deal, negotiations were not devoid of challenges. India’s rejection of provisions related to “data exclusivity,” which could impact its generic drug manufacturing industry, underscores the complexities involved in reaching consensus on sensitive issues. Additionally, limitations persist, particularly concerning Switzerland’s tariff-free entry policy for industrial goods and obstacles in exporting farm produce due to regulatory hurdles.
Nevertheless, the agreement heralds a new era of economic cooperation and opportunity, reaffirming India’s commitment to fostering robust trade relations on the global stage. As both sides embark on this transformative journey, the $100 billion deal stands as a testament to the shared vision of prosperity and collaboration between India and the European Trade Group.
Sources By Agencies
