New Delhi, Oct 1 (UNI) The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) comprising Switzerland, Norway and Iceland, came into effect today and is expected to reduce tariff barriers and expand India’s share in key commodities in EFTA countries.
India’s exports to EFTA stood at USD 72.37 million in 2024, contributing 0.41 percent of EFTA’s total imports.
The agreement signed on March 10, 2024, offers binding commitment of 100 bn US Dollar investment and one million direct jobs in the next 15 years and will stimulate services exports in sectors like IT, business services, education, audio-visual etc.
It also provides Mutual Recognition Agreements in Professional Services like nursing, chartered accountants, architects etc. and incorporates, for the first time in any Free Trade Agreement (FTA) signed by India, a commitment linked to investment and job creation.
The agreement comprises 14 chapters with main focus on market access related to goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access on services, intellectual property rights, trade and sustainable development and other legal and horizontal provisions.
The EFTA’s market access offer under TEPA covers 100 percent of non-agri products and tariff concession on Processed Agricultural Products (PAP). Sensitivity related to PLI in sectors such as pharma, medical devices and processed food etc. have been taken while extending offers.
The agreement goes beyond goods and services and is committed to promoting investments with the aim of increasing the stock of foreign direct investments by USD 100 billion in India in the next 15 years, and to facilitate the generation of one million direct employment in India, through such investments, an official statement said.
EFTA is an important regional group, with several growing opportunities for enhancing international trade in goods and services. EFTA is one important economic block out of the three (other two – EU and UK) in Europe. Among EFTA countries, Switzerland is the largest trading partner of India followed by Norway.
The TEPA will empower India’s exporters by providing access to specialized inputs and create conducive trade and investment environment. This would boost exports of Indian made goods as well as provide opportunities for services sector to access more markets.
As per Article 7.1 of TEPA , the EFTA States shall aim to increase foreign direct investment (FDI) in India by USD 50 billion within 10 years and an additional USD 50 billion in the succeeding 5 years, amounting to a total of USD 100 billion over 15 years.
Concurrently, the EFTA States shall aim to facilitate the generation of 1 million direct jobs in India resulting from these investment inflows.
This investment commitment explicitly excludes foreign portfolio investment (FPI), focusing on long-term capital for productive capacity building.
