Switzerland ratifies landmark trade deal with India, paving way for $100 billion investment

By: Team India Tracker

India and Switzerland share a diplomatic history spanning over seven decades, having signed the Treaty of Friendship in 1948.

In a major diplomatic and economic milestone, Switzerland has officially ratified the Trade and Economic Partnership Agreement (TEPA) with India, solidifying a landmark trade pact between India and the European Free Trade Association (EFTA), comprising Iceland, Liechtenstein, Norway, and Switzerland. The agreement, signed in March 2024 following nearly 16 years of negotiations, is set to come into effect by October this year and is expected to substantially enhance trade and investment flows between the two regions.

Swiss Ambassador to India, Maya Tissafi, hailed the ratification as a “significant milestone” in bilateral relations, underscoring a new chapter in India-Switzerland ties. The agreement aims to reduce trade barriers, streamline customs processes, and improve market access for Swiss exports to India. A key highlight of TEPA is the commitment by EFTA members to invest $100 billion in India over the next 15 years, a move projected to generate around one million jobs across the country. “It’s a win-win situation for all sides,” the envoy remarked.

Source: EFTA

Switzerland already ranks as India’s 12th-largest source of foreign direct investment, with Swiss investments growing from ₹5,935 crore in 2000 to ₹1,07,736 crore by 2024. More than 330 Swiss companies operate in India across sectors including engineering, precision instruments, chemicals, pharmaceuticals, and services. Indian firms, too, are expanding their presence in Switzerland, especially in information technology, machinery, and pharmaceuticals.

Tissafi noted that the Swiss government’s immediate focus would be on ensuring the smooth implementation of TEPA for Swiss companies. The recent establishment of an EFTA desk in February is among the measures introduced to facilitate investments from EFTA nations.

Switzerland and India share a longstanding and multifaceted bilateral relationship, underpinned by numerous agreements across areas such as trade, development cooperation, education and vocational training, visas, migration, air traffic, investment, finance, taxation, and scientific and technological collaboration. Switzerland operates an extensive network of diplomatic and consular representations across India to support Indian and Swiss nationals, businesses, academic institutions, and cultural stakeholders. In 2023, the two countries marked the 75th anniversary of the Indo-Swiss Treaty of Friendship, originally signed on August 14, 1948. This foundational treaty granted Switzerland “most favoured foreign nation” status under Articles 3 to 6, paving the way for subsequent agreements like the Double Taxation Treaty of 1994 (amended in 2010) and the Investment Promotion and Protection Treaty of 1997. Swiss investments in India began as early as the mid-1950s, shaping a strong economic dimension in bilateral ties.

India and Switzerland share a diplomatic history spanning over seven decades, having signed the Treaty of Friendship in 1948. Their partnership has steadily expanded beyond trade to include cooperation in climate action, disaster risk reduction, and environmental sustainability. A recent boost to bilateral innovation came with the launch of the Swiss-Indian Innovation Platform in Bengaluru in October 2023, connecting IITs and Swiss technical universities with private sector leaders to foster cross-border innovation.

Under the Trade and Economic Partnership Agreement (TEPA), EFTA has offered India preferential access on 92.2 percent of its tariff lines, covering a significant 99.6  percent of India’s exports. This includes complete market access for non-agricultural goods and tariff concessions on processed agricultural products. In return, India has extended similar access on 82.7 percent of its tariff lines, encompassing 95.3 percent of EFTA’s exports—though more than 80 percent of these are gold imports, on which the effective duty remains unchanged. India has safeguarded its interests in key sectors linked to the Production-Linked Incentive (PLI) scheme, such as pharmaceuticals, medical devices, and processed foods, while excluding sensitive areas like dairy, soya, coal, and certain agricultural products. Additionally, India has offered commitments in 105 services sub-sectors and secured market access in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland.