The India-EFTA Desk supports EFTA businesses in expanding operations in India. The Trade and Economic Partnership Agreement (TEPA) aims to lower tariffs, boost Indian exports, and increase investments in infrastructure and technology. Despite challenges in market access and agriculture exports, TEPA fosters collaboration and growth through increased trade and job creation.
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India and European Free Trade Association (EFTA) Strengthen Economic Ties with the Inauguration of the India-EFTA Desk.
It is a single-window mechanism designed to support businesses from the European Free Trade Association (EFTA) – comprising Switzerland, Norway, Iceland, and Liechtenstein – in investing, expanding, or establishing operations in India.
It is a comprehensive trade deal signed between India and the European Free Trade Association (EFTA) countries; Iceland, Liechtenstein, Norway, and Switzerland.
EFTA countries plan to invest $100 billion in India over the next 15 years. This investment will focus on infrastructure development, manufacturing, and other critical areas, encouraging technological advancement and innovation.
It makes EFTA the first European bloc to sign such an agreement with India.
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In 2023, India was the fifth-largest trading partner for the EFTA bloc, with a total trade volume of $25 billion. |
Objectives of TEPA
The agreement excludes:
Indian exports of pharmaceuticals, garments, chemicals, and machinery will become more competitive globally.
Investments in sectors like vehicles, food production, railways, and finance can create jobs and improve infrastructure.
The inflow of foreign capital can bring advanced technology and knowledge, boosting productivity and innovation.
Increased trade volume and collaboration in R&D can drive overall economic development.
Swiss manufacturers of machinery, luxury goods, and transportation equipment, as well as pharmaceutical and medical device companies, will gain better access to India’s large and growing market.
EFTA countries can collaborate with Indian researchers and businesses to accelerate innovation in fields like pharmaceuticals, engineering, and IT.
Greater market access can lead to higher sales and profitability for EFTA businesses.
Switzerland’s policy of tariff-free entry for industrial goods from all nations may limit the competitive advantage of Indian products.
Strict sanitary and phytosanitary standards in EFTA countries make it difficult for India to export agricultural products.
Increased imports from EFTA countries may widen India’s trade deficit, though investments could offset this by creating jobs and economic activity.
India needs to focus on improving the quality and competitiveness of its products to boost exports.
Indian agricultural exporters should follow higher sanitary and phytosanitary standards to access EFTA markets.
India must strengthen its domestic industries to reduce reliance on imports and manage trade deficits.
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PRACTICE QUESTION Q. How does the European Union (EU)’s Carbon Border Adjustment Mechanism (CBAM) affect India’s trade with the bloc? 150 words |
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