India to launch trade agreement with EFTA bloc on October 1.
Deal secures $100 billion EFTA investment, creating one million jobs.
India to cut tariffs on 80-85% goods, gain duty-free access.
Switzerland emerges as India’s largest EFTA trade partner despite deficit.
The Centre is set to hold a mega event to launch the trade agreement between India and the four-member European Free Trade Association (EFTA) nations, which is slated to come into force from October 1.
According to government officials, the event will be conducted in Delhi’s Bharat Mandapam and Commerce and Industry Minister Piyush Goyal, key ministers from the EFTA nations, key government officials as well as several industry participants are expected to attend the programme.
Speaking to Business Standard, a government official said, “The idea also is to ensure that industry stakeholders are aware of the deal and well-positioned to take full advantage of it.”
What is the EFTA Bloc?
Four countries, namely Iceland, Switzerland, Norway and Liechtenstein comprise of the EFTA bloc. The Trade and Economic Partnership Agreement (TEPA) is a crucial step for India to deepen economic integration with an important economic bloc in Europe. This is also India’s first trade agreement that will come into effect with any European nation or bloc.
What is the EFTA Deal?
India has promised to reduce tariffs to zero on 80-85 per cent goods from EFTA countries under this deal, while receiving duty-free market access on 99 per cent goods. Both sides of the trade agreement have excluded most of the agriculture and dairy products from duty concession to protect farmers.
The biggest gain from the trade agreement for India is the investment commitment secured from EFTA nations — $50 billion investment in India within 10 years of the agreement taking into effect and an additional $50 billion in the next five years. The investment is expected to facilitate the creation of one million direct jobs in India in 15 years, Business Standard reported.
For the EFTA nations, import tariffs are low, which means that for India, market access gains could be limited. This is the first deal that India has signed where market access is linked to investment.
Switzerland – India’s Biggest Partner in the Pact
Among the four EFTA nations, Switzerland is India’s largest trading partner. India exported goods worth $1.97 billion in FY25, up 1.2 per cent on-year. Of this, three-fourth of the goods were shipped to Switzerland.
On the other hand, imports stood at $22.44 billion in FY25, up 1.7 per cent on-year. Again, of this, 97 per cent of the imports were from Switzerland at $21.8 billion. Thereby, India’s trade deficit with EFTA stood at $120.47 billion.
The trade agreement was signed on March 10, 2024, but procedural formalities in these four nations have delayed the implementation of the deal.
