India inks $100 bn free trade pact with 4 European nations

Sandeep Dikshit

New Delhi, March 10

India signed a free trade agreement (FTA) with the four-nation European bloc EFTA on Sunday with a binding investment commitment of $100 billion over the next 15 years to facilitate the creation of 10 lakh jobs in the country.

What will get cheaper

Luxury watches, chocolates, biscuits, clocks, seafood, fruits (olives & avocados), different oils (cod liver & olive oil), smartphones, bicycle parts,medical equipment and textiles

Landmark agreement

Landmark pact under-lines our commitment to boosting economic growth & creating avenues for our youth. — Narendra Modi, PM

It will take up to a year to implement the agreement due to an elaborate ratification process of the pacts in different countries.

The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway and Switzerland. This is India’s first FTA with a western bloc. The agreement was under negotiation for 16 years although suspended for five years in between. The agreement was signed here by Commerce Minister Piyush Goyal, Swiss Economics Minister Guy Parmelin, Iceland’s Foreign Minister Bjarni Benediktsson, Liechtenstein’s Foreign Minister Dominique Hasler and Norway’s Trade Minister Jan Christian Vestre.

The India-EFTA two-way trade was $18.65 billion in 2022-23 as compared to $27.23 billion in 2021-22 with Switzerland as the largest trading partner followed by Norway.

The EFTA text states that the four nations “shall aim to increase foreign direct investment” by $50 billion within 10 years and an additional $50 billion in the succeeding five years. Officials said mechanisms were in place to facilitate the assured investments and hinted that India would be well within its rights to withdraw tariff concessions if the expected investment commitments do not materialise.

Almost all Indian industrial goods would get duty-free access while there would be duty concessions on processed agricultural products, said the Commerce Ministry. On the other hand, India is offering concessions on 82.7% of its tariff lines or product categories, which cover 95.3% of EFTA exports. As more than 80% of the EFTA exports to India is gold, India has reduced the bound rate (highest rate) by 1% to 39%. India will also provide duty concessions on certain production-linked incentive sectors like pharma and medical devices. On the exclusion list are dairy, soya, coal and sensitive agricultural products.