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| India's Historic Trade Pact with EFTA [Source: wikipedia] |
India recently achieved a significant milestone by signing a groundbreaking free trade agreement (FTA) with the European Free Trade Association (EFTA), comprising Switzerland, Norway, Liechtenstein, and Iceland. This Trade and Economic Partnership Agreement (TEPA) holds immense promise for India's economic growth, job creation, and foreign investment influx.
EFTA, an inter-governmental organization fostering free trade, serves as an alternative for states uninterested in joining the European Union (EU). Notably, India is concurrently negotiating a comprehensive FTA with the EU.
Key Aspects of the Agreement:
Investment Commitment: EFTA nations pledge a substantial $100 billion investment in India over 15 years, promising to generate one million job opportunities.
Tariff Reductions and Market Access: TEPA facilitates significant tariff reductions, expands market access, and streamlines customs procedures between India and EFTA countries.
Human Rights and Sustainable Development: This FTA pioneers a dedicated chapter on human rights and sustainable development, a first for EFTA agreements.
Comprehensive Coverage: With 14 comprehensive chapters, TEPA encompasses various aspects including trade in goods, rules of origin, intellectual property rights, trade in services, investment promotion, government procurement, technical barriers to trade, and trade facilitation.
Benefits for EFTA Nations:
EFTA states stand to benefit from accessing India's burgeoning market, empowering their companies to fortify and diversify their supply chains. The agreement mutually amplifies opportunities for India and EFTA members, harnessing their economic potential.
India's Perspective:
Commerce and Industry Minister Piyush Goyal hails the signing as a "watershed moment," marking India's inaugural modern trade pact with a group of developed nations. This accord is anticipated to allure more foreign investments from EFTA, fostering job creation within India.
Negotiation Timeline:
TEPA negotiations commenced in January 2008, spanning 13 rounds until November 2013 when they paused. Subsequently, negotiations recommenced in October 2023, culminating swiftly.
Trade Statistics:
India-EFTA bilateral trade amounted to $18.65 billion in 2022-23, a slight dip from $27.23 billion in the previous fiscal year. Despite a trade deficit of $14.8 billion, Switzerland remains India's primary trading partner within the EFTA bloc, trailed by Norway.
This historic agreement with EFTA signifies India's commitment to fostering robust international trade ties, poised to catalyze economic prosperity and development for all involved parties.