ANS: India and the European Free Trade Association (EFTA) have inked a significant agreement, the Trade and Economic Partnership Agreement (TEPA), cementing their commitment to bolster trade and economic ties.
According to a statement from the Ministry of Commerce & Industry, the key features of the agreement include EFTA’s pledge to promote investments aimed at increasing foreign direct investments in India by $100 billion over the next 15 years. This initiative is expected to generate 1 million direct jobs in India. Notably, these investments exclude foreign portfolio investments.
Established in 1960, EFTA is an intergovernmental organization dedicated to promoting free trade and economic integration for the benefit of its four member states: Switzerland, Iceland, Norway, and Liechtenstein.
The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the signing of TEPA with the EFTA states, marking a significant milestone in India’s trade relations.
Commerce and Industry Minister Piyush Goyal commented, “TEPA is a modern and ambitious Trade Agreement. For the first time, India is signing an FTA with four developed nations—an important economic bloc in Europe. This agreement includes a binding commitment of $100 billion in investment and the creation of 1 million direct jobs in the next 15 years.”
Goyal emphasized that this agreement would bolster the Make in India initiative, providing opportunities for India’s young and talented workforce while allowing Indian exporters to access large European and global markets.
The agreement encompasses 14 chapters with a focus on market access for goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access for services, intellectual property rights, trade and sustainable development, and other legal and horizontal provisions.
EFTA’s market access offer includes 92.2% of its tariff lines, covering 99.6% of India’s exports. On the other hand, India is offering 82.7% of its tariff lines, covering 95.3% of EFTA exports, with particular attention paid to sectors such as pharma, medical devices, processed food, and others.
Overall, the TEPA is expected to stimulate services exports, enhance access to specialized inputs, and create a conducive trade and investment environment. It will also open doors for Indian companies to extend their market reach to the EU, with Switzerland serving as a potential base for this expansion.
The agreement is poised to give a significant boost to “Make in India” and Atmanirbhar Bharat initiatives, particularly in sectors such as infrastructure, manufacturing, pharmaceuticals, chemicals, food processing, transport, logistics, banking, financial services, and insurance.
TEPA is seen as a pivotal step in accelerating the creation of a large number of direct jobs for India’s young workforce in the coming years, as well as facilitating technology collaboration and access to world-leading technologies in various sectors.