An important step forward in economic ties was recently achieved when India and the European Free Economic Association (EFTA) signed a free trade agreement in New Delhi. Iceland, Norway, Switzerland, and Liechtenstein are all included in the agreement as EFTA members. The agreement, according to Prime Minister Narendra Modi, is a "watershed moment" for the countries involved, highlighting the shared commitment to free, fair trade that promotes development and job creation.
Key Highlights of the Agreement
- The Trade and Economic Partnership Agreement (TEPA) aims to attract $100 billion in investments over 15 years, with a focus on generating 1 million direct jobs in India.
- The agreement covers various aspects such as trade in goods and services, investment promotion, intellectual property rights, and trade facilitation.
- It is designed to enhance market access, simplify customs procedures, and promote investment opportunities between India and the EFTA members.
Free Trade Deal Significance
- Expected to bring economic benefits like integrated supply chains, new business opportunities, increased trade and investment flows, job creation, and economic growth.
- Marks a crucial milestone in the EFTA nations-India economic partnership.
- Benefits sectors like industrial goods, processed agricultural products, pharma, medical devices, and processed food items.
A WATERSHED MOMENT!
The historic India-EFTA Trade & Economic Partnership Agreement (TEPA) is the first 'Free Trade Agreement' inked with a binding commitment to invest $100 billion in India from the European Free Trade Association countries. pic.twitter.com/8GFW2JUmyE— Piyush Goyal (मोदी का परिवार) (@PiyushGoyal) March 10, 2024
Trade Relations Between India and EFTA
India has been exporting goods to the EFTA countries, and in 2022–2023, those exports came to $1.92 billion. There was a $14.8 billion trade deficit during that time due to the $16.74 billion in EFTA country imports. India's top trading partner in the EFTA is Switzerland, with substantial commerce in goods like machinery, gold, and medicines. The previous fiscal year saw $17.14 billion in bilateral commerce between Switzerland and India.
Investment Flows and Opportunities
Between April 2000 and December 2023, Switzerland made around $10 billion in foreign direct investments (FDI) in India, making it a significant investor in the country. Big pharmaceutical corporations like Novartis and Roche are based in the nation and have a substantial presence there. The free trade agreement is anticipated to improve economic relations between India and the EFTA members, generate new business opportunities, and increase investment flows.
Summary
India and EFTA members' free trade agreement is a major step towards economic cooperation, commerce, investment, and mutual prosperity. The treaty is projected to increase commercial prospects, market access, and economic growth in member countries. The agreement ensures future collaborations and promotes open, free, and equitable trade by focusing on shared prosperity and inclusive partnerships.
Image Source: Multiple Agencies
(Inputs from agencies)
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