Piyush Goyal, Minister of Commerce & Industry, Consumer Affairs, Food & Public Distribution & Textiles.
Credit: PTI Photo
India and the European Free Trade Association (EFTA), a group consisting of Iceland, Liechtenstein, Norway, and Switzerland, signed a free trade agreement on Sunday, March 10. This agreement aims to encourage investments and enhance trade in goods and services between the two parties.
This is India's fourth such agreement since 2014. The previous agreements were signed with Mauritius, the UAE, and Australia. EFTA, though not part of the European Union (EU), is an organization that promotes free trade among its member countries.
The deal involves EFTA countries committing to invest $100 billion in India over the next 15 years. The agreement, officially dubbed Trade and Economic Partnership Agreement (TEPA), covers various aspects such as trade in goods, rules of origin, intellectual property rights, services, investment promotion, government procurement, technical trade barriers, and trade facilitation.
"EFTA countries gain market access to a major growth market. Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs...All in all, the TEPA will allow us to make better use of our economic potential and create additional opportunities for both India and the EFTA States," Federal Councillor Guy Parmelin, speaking on behalf of the EFTA Member States, said.
The negotiations for this agreement began in 2008, with 13 rounds of talks held until 2013. After a hiatus, negotiations resumed in October 2023 and concluded swiftly.
Commerce Minister Piyush Goyal highlighted the historic nature of the agreement, emphasizing the binding commitment of EFTA countries to invest $100 billion in India.
"There are big opportunities in businesses in pharma sector, medical devices, food, R&D which can offer…This partnership will create 10 lakh jobs,” Commerce Minister Piyush Goyal said in a briefing.
“The culmination of efforts to finalise an innovative, well-balanced trade deal that reflects our respective developmental aspirations is commendable. One of the most pioneering free trade agreements ever concluded between our countries, the Economic Participation Agreement (TEPA) emphasizes our steadfast commitment to shared prosperity ..,” PM Narendra Modi said in a statement.
The two-way trade between India and EFTA was $18.65 billion in 2022-23, compared to $27.23 billion in the previous fiscal year, with a trade deficit of $14.8 billion. Switzerland is currently India's largest trading partner in the EFTA bloc, followed by Norway.
India is also separately negotiating a comprehensive free trade agreement with the European Union (EU), a 27-nation bloc.
(With PTI Inputs)