New Delhi: The implementation process of free trade agreement (FTA) between India and the four-nation European bloc EFTA is progressing fast and is expected to come into force before the end of this year, Commerce and Industry Minister Piyush Goyal said.
The two sides signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024. Under the pact, India has received an investment commitment of USD 100 billion in 15 years from the grouping while allowing several products such as Swiss watches, chocolates and cut and polished diamonds at lower or zero duties.
The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.
“Yes, EFTA is progressing very fast,” Goyal told PTI when asked if the agreement would come into effect this year.
The minister said the Swiss Council of States has approved the agreement and now will go to their National Council for approval.
“So this overwhelming support in political circles in Switzerland for the TEPA with EFTA is truly a sign of the times to come… and in their statement also, it shows that that it has cleared an important hurdle and they are hoping to bring in entry to force by autumn of 2025, before the end of calendar year 2025,” Goyal said.
The bloc committed an investment of USD 100 billion — USD 50 billion within 10 years after the implementation of the agreement and another USD 50 billion in the next five years — which would facilitate the creation of 1 million direct jobs in India. This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far.
The commitment is the key substance of the TEPA (Trade and Economic Partnership Agreement), which took almost 16 years to conclude, for India in return for opening its markets for several products coming from the EFTA nations.
There is a provision in the agreement that if the proposed investments would not come because of some reasons, India can suspend duty concessions to the four countries.
Domestic customers will get access to high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices as India will phase out customs duties under the trade pact on these goods over 10 years.
It is taking time to implement the agreement due to an elaborate ratification process of these pacts in different countries. In India, such agreements are approved by the union Cabinet, in EFTA countries, they need approval from their parliament.
On the progress of FTA negotiations with other countries, Goyal said he has held meetings with the new UK trade minister on the proposed pact.
India and the UK are expected to hold the next round of talks for a proposed FTA later this month to resolve the pending issues and close the negotiations.
The talks for the proposed FTA began in January 2022. The 14th round of talks stalled as the two nations stepped into their general election cycles.
With the European Union (EU) also, the minister has held discussions with European Commissioner for Trade Maros Sefcovic.
“We have agreed to meet soon again in the next couple of months to take the talks forward,” he added.
He added that India will never compromise its national interest in these agreements.
“Unless the agreement is equitable, fair and balanced, India will not agree to any irrational terms,” he noted.
