India, EFTA ink free trade agreement; PM Modi calls it 'watershed moment'
India and the four-nation European bloc EFTA on Sunday signed a free trade agreement under which New Delhi has received an investment commitment of $100 billion in the next 15 years.
Prime Minister Narendra Modi hailed the signing of the India-EFTA agreement as a "watershed moment" and termed it "one of the most pioneering tree trade agreements ever concluded between our countries".
Modi also said, "The tenth of March 2024 marks a new tum and a watershed moment in the bilateral. ationship between India and ENTA countries of Switzerland, Nonway, Iceland and Liechtenstein."
"India will extend all possible support to EFTA countries and facilitate industry and businesses, not only to achieve the committed targets, but also go beyond them," he added.
Prime Minister Modi's message after the India-EFTA trade deal was signed and exchanged.
Credit: X/@ANI
Commerce and Industry Minister Piyush Goyal also described the signing as a "watershed moment", as it is India's first modern trade pact with a bloc having developed countries.
He said that for the first time in a trade agreement, EFTA had committed to invest $100 billion in the next 15 years.
It would take around a year for the agreement to come into force.
The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.
The agreement has 14 chapters, including trade in goods, rules of origin, intellectual property rights (IPRs), trade in services, investment promotion and cooperation, government procurement, technical barriers to trade 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.
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.
India and EFTA have been negotiating the pact, officially dubbed the Trade and Economic Partnership Agreement (TEPA), since January 2008. Thirteen rounds of talks were held till November 2013 before negotiations were put on hold.
Both sides resumed the negotiations in October 2023 and concluded it in a fast-track mode.
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 is negotiating a comprehensive free trade agreement separately with the EU, the 27-nation bloc.
India had earlier used the strategy of expediting or fast-tracking FTA negotiations successfully with the UAE and Australia.
India-EFTA two-way trade was $18.65 billion in 2022-23 compared to $27.23 billion in 2021-22. The trade deficit was $14.8 billion in the last fiscal.
Switzerland is the largest trading partner of India followed by Norway in the bloc.
(With PTI inputs)