New Delhi: India and the European Free Trade Association (EFTA), a four-nation grouping that includes Iceland, Liechtenstein, Norway and Switzerland, on Sunday signed a trade and economic partnership agreement that seeks to improve market access and facilitate $100 billion investments in India over the next 15 years.
“For the first time in history of FTAs (free trade agreements), binding commitment of $100 billion investment and 1 million direct jobs in the next 15 years has been given,” India’s Commerce and Industry Minister Piyush Goyal told reporters after signing of the agreement.
“Despite structural diversities in many aspects, our economies possess complementarities that promise to be a win-win situation for all nations,” Prime Minister Narendra Modi said in a written message.
The two sides had been negotiating the deal since January 2008. After 13 rounds of negotiations, it was put on hold in November 2013 and was resumed after a gap of 10 years last October
The two sides concluded the talks in a fast-track mode and the deal was signed in New Delhi on Sunday, just a few days ahead of the announcement of dates for Lok Sabha elections in India.
“The investment promise from EFTA nations is a big opportunity for pharma, medical devices and food sectors,” Goyal said. He further added that the agreement will provide a window to Indian exporters to access large European and global markets.
The promised $100 billion investments do not cover foreign portfolio investments.
The pact is termed as Trade and Economic Partnership Agreement (TEPA). It comprises of 14 chapters with main focus on market access related to goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access on services, intellectual property rights, trade and sustainable development and other legal and horizontal provisions.
As part of the deal, EFTA has offered 92.2 per cent of its tariff lines which covers almost all of India’s exports. The EFTA’s market access offer covers 100 per cent of non-agri products and tariff concession on processed agricultural products.
On the other hand India has offered 82.7 per cent of its tariff lines which covers 95.3 per cent of EFTA exports of which more than 80 per cent import is gold. The effective duty on gold remains untouched.
EFTA is an inter-governmental organisation set up in 1960 for the promotion of free trade and economic integration of four European countries. EFTA member countries are not a part of the European Union (EU). India is separately negotiating free trade deals with the EU and the United Kingdom.
PM Modi noted that the global leadership of EFTA countries in innovation and R&D across diverse spheres like digital trade, banking and financial services, and pharma will open up new doors of collaboration.
Welcoming the deal, Chandrajit Banerjee, Director General of industry body CII, said the agreement will usher in multidimensional gains to Indian industry. “It would elevate trade, promote technology and knowledge transfer, and encourage investments. Improved market access for goods will boost India’s export potential to EFTA markets and greatly expand employment opportunities,” Banerjee said.