The Indian government has extended significant concessions to the European Free Trade Association (EFTA), offering 82.7% of its tariff lines to cover 95.3% of EFTA exports. This reduction in customs duties on goods from EFTA countries is set to make Swiss cheese, chocolate, wine, watches, and other products more affordable for Indian consumers.
India has also granted concessions in 105 sub-sectors, including IT, healthcare, and accounting, which are expected to boost its services exports to EFTA countries. This agreement is poised to enhance India’s services exports, particularly in IT, business, personal, cultural, sporting, recreational, educational, and audio-visual services, where the country has significant strengths.
The trade deal will support EFTA countries in expanding their operations in India, backed by favorable policy measures and concessions. A distinctive aspect of this agreement is EFTA’s binding commitment to invest USD 100 billion in India over the next 15 years. These investments will target key Indian manufacturing sectors such as chemicals, pharmaceuticals, machinery, and food processing, as well as service exports like IT and accounting, and infrastructural sectors.
The deal is expected to enhance India’s manufacturing and services infrastructure, spur innovation, create jobs, and upskill the workforce. It aims to boost domestic manufacturing in areas such as infrastructure, connectivity, machinery, pharmaceuticals, chemicals, transport, logistics, banking, financial services, and insurance.
Moreover, the agreement offers Indian companies a gateway to the EU market through Switzerland, which exports over 40% of its global services to the EU. This is set to strengthen India’s trade relations with Europe by improving market access for both India and EFTA members.
With this FTA, the EFTA bloc gains access to a burgeoning Indian market, estimated to become the world’s fifth-largest consumer market by 2025. For India, the deal provides access to Europe, especially benefiting manufacturers and exporters in food processing, pharmaceuticals, and organic chemicals.
EFTA has offered 92.2% of its tariff lines to Indian exporters, granting 100% market access for non-agricultural products and significant tariff concessions on Processed Agricultural Products (PAP). The trade deal prioritizes tariff reductions and simplifies trade procedures between India and EFTA, targeting high-value items like fish from Iceland and Norway, advanced chemicals, pharmaceuticals, machinery, and Swiss chocolate.
EFTA countries can now export processed foods, electrical machinery, and engineering items to a vast Indian market of 1.4 billion people at low tariffs. Simultaneously, India seeks foreign investments from EFTA countries in manufacturing and aims to leverage the EFTA bloc for better market access to other European nations.
The trade deal is anticipated to increase foreign investments from EFTA nations, tapping into funds like the Norwegian Sovereign Wealth Fund and Switzerland’s established trade interests in India. This influx of investment and job creation is expected to bolster India’s economy and provide revenue stability.
Furthermore, the agreement is projected to enhance bilateral trade in technology and knowledge within the manufacturing sector, including pharmaceuticals, food processing, and automobiles.
India signed the free trade agreement with EFTA on March 10, concluding 21 rounds of negotiations over 15 years. The agreement is set to bring USD 100 billion in investments and generate one million direct jobs in India over the next 15 years. As part of the deal, India has opened 105 sub-sectors to EFTA and secured commitments in 128 from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland.
With a combined population of 13 million, EFTA countries rank as the world’s tenth-largest traders of merchandise and eighth-largest providers of commercial services. This trade deal represents a significant stride in India’s efforts to diversify its global trade partnerships and enhance its export capabilities, foreign investments, and supply chain resilience.
Established in 1960, EFTA is an intergovernmental organization comprising Iceland, Liechtenstein, Norway, and Switzerland, dedicated to promoting economic cooperation and free trade across Europe.
