India seeks investment commitment from Switzerland under proposed EFTA trade pact

India has sought investment commitments from Switzerland under the proposed free trade agreement with the four-nation European Free Trade Association (EFTA) bloc. The investment commitment would help India balance Switzerland's decision to remove customs duties on most of its goods.

New Delhi: India has sought investment commitments from Switzerland under the proposed free trade agreement with the four-nation EFTA bloc, a top government official said on Tuesday.

The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland. The official also said negotiations for the pact are at an advanced stage and both sides are trying to conclude it fast.

The investment commitment would help India balance Switzerland's decision to remove customs duties on most of its goods.

When asked if this move would have an implication on the agreement, the official said that it can be bargained against many other things.

"We have told them that we will be requiring commitments on investments so that this zero duty on goods can balance more investments and more manufacturing in the country," the official told PTI.

The Indian negotiators are also trying to see how the Swiss companies can come and manufacture in India so that it gives a boost to Make in India programme and also helps in raising the domestic manufacturing power.

When asked about the demand for duty cut in gold by some EFTA members, the official said "that is part of it, but our major focus is on non-gold issues".

Switzerland is the largest source of gold imports, with about 41 per cent share during April-October this fiscal, followed by the UAE (about 13 per cent) and South Africa (about 10 per cent). The precious metal accounts for over 5 per cent of the country's total imports.

Switzerland has large historical accumulations of gold and it primarily refines imported gold.

In 2022-23, India's imports from Switzerland stood at $15.79 billion, in stark contrast to its exports of $1.34 billion, leading to a substantial trade deficit of $14.45 billion.

India received about $10 billion foreign direct investments from Switzerland during April 2000 and September 2023.

India and EFTA have been negotiating the pact, officially dubbed as Trade and Economic Partnership Agreement (TEPA), since January 2008 to boost economic ties.

Commerce and Industry Minister Piyush Goyal recently held a meeting with Swiss Federal Councillor Guy Parmelin in Mumbai.

Parmelin, in a social media post on X, had said that officials are working round the clock to settle last details so that it can be signed as soon as possible.

"At the last-minute invitation of my Indian counterpart @PiyushGoyal, I travelled directly from the WEF in Davos to Mumbai/India. After 16 years of negotiations, we found balanced solutions to the main open issues of the EFTA-India trade agreement," Parmelin had said.

The last round of talks between the countries concluded on January 13 here.

Negotiations are held on various chapters, including trade in goods, rules of origin, intellectual property rights (IPRs), trade in services, investment promotion and cooperation, trade and sustainable development, and trade facilitation.

EFTA has 29 free trade agreements (FTAs) with 40 partner countries, including Canada, Chile, China, Mexico, and Korea.

Under free trade pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.

EFTA countries are not part of the European Union (EU). It is an inter-governmental organisation for the promotion and intensification of free trade. It was founded as an alternative for states that did not wish to join the European community.

India's exports to EFTA countries during 2022-23 stood at $1.92 billion against $1.74 billion in 2021-22. Imports aggregated at $16.74 billion during the last fiscal compared to $25.5 billion in 2021-22.

The trade gap is in favour of the EFTA group, according to the data of the commerce ministry.