Friday, 17 May, 2024
India is to receive duty-free market access for over 99 percent of imports, including rice, and has committed to reducing tariffs to zero on 80 to 85 percent of items from EFTA nations. Image Source: ANI
India and the European Free Trade Association (EFTA) countries- Switzerland, Iceland, Norway and Liechtenstein on Sunday, March 10, 2024 signed a Free Trade Agreement (FTA).
After around 16 years of negotiations involving 21 formal rounds of talks, India and the European Free Trade Association (EFTA) countries- Switzerland, Iceland, Norway and Liechtenstein on Sunday, March 10, 2024 signed a Free Trade Agreement (FTA). EFTA is an inter-governmental organization set up in 1960 for the promotion of free trade and economic integration for the benefit of its four Member States. EFTA is a significant regional organisation that offers several expanding chances to improve global trade in products and services. Of the three major economic blocs in Europe (the other two being the EU and the UK), EFTA is one. Switzerland and Norway are India's two biggest trading partners among EFTA nations.
The 14 chapters of the agreement are primarily devoted to the following topics: trade remedies, sanitary and phytosanitary measures, rules of origin, market access for goods, trade facilitation, investment promotion, market access for services, intellectual property rights, trade and sustainable development, and other legal and horizontal provisions.
The government would gradually eliminate customs charges on imported goods after signing this trade agreement with EFTA, giving local consumers cheaper access to premium Swiss items including watches, chocolates, cookies, and clocks. Global Trade Research Initiative (GTRI), an economic think tank, examined the TEPA documents and found that India has granted tariff discounts to certain products imported from Switzerland under the agreement. Products that will see price reductions in Indian marketplaces include wine, tuna and salmon from the sea, Mediterranean fruits, coffee, various oils, a range of sweets, processed meals, and coffee.
News agency PTI quoted GTRI founder Ajay Srivastava as saying, “India will soon have access to high-quality Swiss products at lower prices because it has decided to remove tariffs on many Swiss goods over seven to ten years. Wines priced between $5 and less than $15 will see a duty reduction from 150 percent to 100 percent in the first year, then decreasing gradually to 50 percent over 10 year.” He further added, “Tariffs on cut and polished diamonds will be reduced from 5 percent to 2.5 percent in five years after the implementation of the agreement.”
Gold ($12.6 billion), machinery ($409 million), pharmaceuticals ($309 million), coking and steam coal ($380 million), watches ($211.4 million), soybean oil ($202 million), optical instruments and orthopaedic appliances ($296 million), and chocolates ($7 million) are among India's top imports from Switzerland. India has declined to lower the effective tariffs on cars, dairy products, jewellery, gold, and cheese. Gold makes up around 82 percent of India's imports from EFTA nations, primarily Switzerland. India has only consented to lower the bound rate for gold from 40 percent to 39 percent, even though the applied rate is currently 15 percent.
India is to receive duty-free market access for over 99 percent of imports, including rice, and has committed to reducing tariffs to zero on 80 to 85 percent of items from EFTA nations. To safeguard their farmers, both parties have excluded the majority of agricultural and dairy products from duty concessions.
Speaking on the occasion, Piyush Goyal, Minister of Commerce and Industry said, "TEPA is a modern and ambitious Trade Agreement. For the first time, India is signing FTA with four developed nations - an important economic bloc in Europe. For the first time in history of FTAs, binding commitment of $100 bn investment and 1 million direct jobs in the next 15 years has been given. The agreement will give a boost to Make in India and provide opportunities to young & talented workforce. The FTA will provide a window to Indian exporters to access large European and global markets."
The deal's signing, according to Prime Minister Narendra Modi's statement, is "a watershed moment." He also added that new avenues for cooperation will be opened by "the global leadership of EFTA countries in innovation and R&D across diverse spheres." In India's expanding industries—such as digital trade, banking, financial services, transportation, logistics, industrial machinery, biotechnology, pharmaceuticals, chemicals, food processing, and clean energy—he highlighted prospects for foreign direct investment (FDI) for the European bloc.
