The Trade and Economic Partnership Agreement (TEPA) between India and the four-nation European bloc EFTA, which was signed on March 10, 2024, will be implemented from October 1 this year, said Commerce and Industry Minister, Piyush Goyal, on Saturday.
“India-EFTA TEPA to come into effect from 1st October,” Goyal said in a post on X.
The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland; of which Switzerland is the biggest trading partner of India. It has low trade volumes with the remaining three countries.
India-EFTA two-way trade in 2024-25 was USD 24.4 billion.
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The pact, a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far, includes a commitment by the bloc to invest USD 100 billion in India over a period of 15 years to facilitate the creation of one million direct jobs in the country.
While USD 50 billion would be pumped into India within 10 years after the implementation of the agreement, another USD 50 billion would be invested in the next five years.
The commitment is the key substance of the agreement, which took almost 16 years to conclude for India in return for opening its markets for several products coming from the EFTA nations, including Swiss watches, chocolates, and cut and polished diamonds at lower or zero duties.
India would be offering 82.7 per cent of its tariff lines or product categories under the pact, which cover 95.3 per cent of EFTA exports, of which more than 80 per cent of imports are gold.
Domestic customers, meanwhile, will get access to high-quality Swiss products, such as watches, chocolates, biscuits, and clocks, all at lower prices, as India will phase out customs duties on these over the next 10 years.
In the services sector, the commerce ministry revealed that India has offered 105 sub-sectors to the EFTA, including accounting, business services, computer services, distribution and health.
In return, the country has secured commitments in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland, and is expected to receive a boost in legal, audio-visual, R&D, computer, accounting, and auditing services.
Further, the pact would provide an opportunity for domestic exporters to integrate into the European Union’s markets, which receive over 40 per cent of services exports from Switzerland, which can serve as a base for Indian companies hoping to extend their market reach to the EU.
On the ongoing tariff negotiations with the US, Goyal said the talks “hinge on national interest”.
“At no point of time will the Narendra Modi government ever allow national interest to be compromised,” he said.
Speaking at the Assocham First Managing Committee Meeting FY2025-26, the commerce and industry minister said “the world is recognising India’s strength, talent and skill”, and “that is what gives us that negotiation leverage”.
Negotiating with advanced or developed countries, Goyal said, showed that India was looking at “complementary economies”.
Stressing on the importance of building resilient supply chains, the minister said that despite having massive imports coming in, India has huge domestic demand which can be met with high-quality production.
A big takeaway from the pandemic, he added, was that the “ban on the export of permanent magnets or fertiliser that has been imposed in the last few months.”
“It teaches us a big lesson,” Goyal said.
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