A landmark trade agreement between New Delhi and the European Free Trade Association (EFTA) is poised to significantly boost market access for Swiss businesses in India while enhancing legal frameworks, the Swiss government announced on Sunday.
The Trade and Economic Partnership Agreement (TEPA), signed by EFTA states - Iceland, Liechtenstein, Norway, and Switzerland - after 16 years of negotiations, is expected to pave the way for a USD 100 billion investment in India over the next 15 years.
In addition to providing opportunities for Indian exporters to access European and global markets, the pact allows companies from EFTA nations to expand their businesses and investments in India.
Switzerland swiftly announced the initiation of its parliamentary approval process for TEPA following the deal's sealing, aiming to ratify it by 2025 at the latest, signaling a significant milestone in Swiss trade policy.
Presently, India imposes steep import tariffs on most products, but under the Free Trade Agreement (FTA), it will either eliminate or partially reduce customs tariffs on 95.3% of industrial imports from Switzerland (excluding gold) immediately or with transition periods.
The agreement also grants Switzerland tariff-free access to the Indian market for select agricultural products after a transition period of up to 10 years, bolstering the competitiveness of Swiss exports to India.
Moreover, improvements in intellectual property rights, particularly in legal certainty, patent procedures, and the protection of 'Swissness,' are incorporated into the deal, ensuring access to medicines in India remains unimpeded.
Highlighting the comprehensive nature of the agreement, the Swiss government noted the inclusion of a legally binding chapter on trade and sustainable development, enabling EFTA states to address trade-related sustainability considerations effectively.
Additionally, a chapter dedicated to promoting investments in India by EFTA companies reflects India's keen interest in attracting additional investment from Switzerland and other EFTA states.
The bloc's commitment of a USD 100 billion investment, with USD 50 billion allocated within 10 years post-implementation and the remaining USD 50 billion in the subsequent five years, is expected to create one million direct jobs in India, marking a precedent-setting pledge in Indian trade deals.
Indian consumers stand to benefit from the agreement as they gain access to high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices, with customs duties phased out over 10 years.
Furthermore, India will provide duty concessions on specific production-linked incentive sectors, including pharmaceuticals, medical devices, and processed food, while excluding sectors such as dairy, soya, coal, and sensitive agricultural products from duty concessions.
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