India-EFTA Signed a Trade and Economic Partnership Agreement

On March 10th, 2024, India and the European Free Trade Association (EFTA) signed a Trade and Economic Partnership Agreement (TEPA). 

• EFTA was established in 1960, is an intergovernmental organization. Its purpose is to promote free trade and economic integration to benefit its four member states.
• India has been working on a TEPA with the EFTA countries, which include Switzerland, Iceland, Norway, and Liechtenstein. 

TEPA

The Trade Agreement between India and four developed nations, known as TEPA, is a significant step forward for the country's economic growth. 

This ambitious agreement marks the first time India has signed an FTA with such a prominent economic bloc in Europe.

In a historic move, the agreement includes a binding commitment of $100 billion investment and 1 million direct jobs within the next 15 years. 

The agreement is expected to provide a much-needed boost to the Make in India initiative and enable the talented young workforce to explore new opportunities. 

With this FTA, Indian exporters will have a window of access to large European and global markets, generating promising prospects for growth.

About the agreement 

• The agreement consists of 14 chapters, primarily emphasizing market access pertaining to 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.

Highlights of the agreement

• The EFTA has made a commitment to promote investments in India. The aim is to increase the stock of foreign direct investments by USD 100 billion in the next 15 years. The investments will create one million direct jobs in India. 
• This commitment is the first-ever legal commitment made about promoting target-oriented investment and job creation in the history of FTAs. 
• EFTA is offering 92.2% of its tariff lines, covering 99.6% of India's exports. The market access offer covers 100% of non-agri products and tariff concession on Processed Agricultural Products (PAP). India is offering 82.7% of its tariff lines, covering 95.3% of EFTA exports. 
• Sensitivity related to PLI in sectors such as pharma, medical devices & processed food etc. have been taken while extending offers. India has excluded dairy, soya, coal, and sensitive agricultural products. 
• TEPA would boost our services exports in various sectors such as IT, business, education, sports, and audio-visual services. It offers better access through digital delivery of services, commercial presence, and improved entry and temporary stay of key personnel. TEPA also has provisions for mutual recognition agreements in professional services.
• TEPA's IPR commitments are at TRIPS level. The IPR chapter with Switzerland reflects India's robust IPR regime. Concerns related to evergreening of patents and interests in generic medicines have been addressed.
• India prioritizes sustainable development, social welfare, and environmental protection. TEPA streamlines trade procedures, boosts exports, and creates favorable trade & investment conditions for Indian goods and services.
• TEPA offers Indian companies an opportunity to expand their market reach to the EU through Switzerland, which exports over 40% of its global services to the EU. The agreement will boost domestic manufacturing in various sectors, such as infrastructure, manufacturing, pharmaceuticals, and more.
• TEPA aims to create direct job opportunities for India's young workforce and provide access to advanced technologies in various fields such as precision engineering, health sciences, renewable energy, and innovation in the next 15 years.

About EFTA

The European Free Trade Association (EFTA) is a significant regional organization that offers numerous prospects for improving the global exchange of goods and services. EFTA is a major economic entity within Europe, alongside the European Union (EU) and the United Kingdom (UK). Notably, Switzerland is India's top trading partner among EFTA member nations, with Norway following closely behind