NEW DELHI: India and the four-member European trade bloc EFTA, including Norway and Switzerland, signed a $100-billion free trade agreement on Sunday to promote investment and exports, officials said.

The deal will see the European Free Trade Association (EFTA) — made up of non-European Union nations, including Iceland and Liechtenstein — invest $100 billion over 15 years in India, the world’s fifth largest economy, India’s Trade Minister Piyush Goyal said.

“The India-EFTA Trade and Economic Partnership Agreement (TEPA) marks a historic milestone in our growing partnership,” Goyal said after the signing in New Delhi.

The agreement “will pave the path for mutual growth and prosperity” by boosting exports, promoting investment and creating employment, he added. The deal was signed after several rounds of negotiations spanning 16 years.

Pact covers some new elements such as intellectual rights and gender equity

Indian Prime Minister Narendra Modi said the trade agreement “symbolises our shared commitment to open, fair and equitable trade”, according to a statement read out at the signing ceremony.

Swiss Economy Minister Guy Parmelin said the deal “will allow us to make better use of our economic potential and create additional opportunities for both India and the EFTA states”.

“EFTA countries gain market access to a major growth market... India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs”, he added.

EFTA was established in 1960 to promote free trade and economic integration between its members. In 2021, it was the 10th largest trader in the world in terms of merchandise, and the eighth largest in services.

In recent years, India has signed trade agreements with Australia and the United Arab Emirates. A long-talked-about trade deal with Britain is also said to be in the final stages.In turn, India will lift, or partially remove, very high customs duties on 95.3 per cent of industrial imports from Switzer­land, excluding gold, either immediately or over time, the Swiss government said in a statement.

“Norwegian companies exporting to India today meet high import taxes of up to 40pc on certain goods,” Industry Minister Jan Christian Vestre said in a separate statement.

“With the new deal, we have secured nil import taxes on nearly every Norwegian good.” The pact covers some new elements such as intellectual rights and gender equity, Goyal added, telling a press conference, “It is a modern trade agreement, fair, equitable and win-win for all five countries.”

The five signatories must ratify Sunday’s deal before it can take effect, with Switzerland planning to do so by 2025. The news comes ahead of general elections due by May at which Modi will seek a record third term.

India has committed to cut its bound tariff rate’ on gold to 39pc from 40pc, but does not anticipate much impact on imports of the metal from Switzerland, which were estimated at $16 billion last fiscal year, an Indian government official said.

The Indian market offers immense opportunities for trade and investment, said Swiss economic official Guy Parmelin, adding that the pact was the result of 21 rounds of talks.

Published in Dawn, March 11th, 2024