India and EFTA Trade Agreement: Implementation Timeline Announced

The eagerly anticipated free trade agreement between India and the European Free Trade Association (EFTA) is set to take effect by September 2024, as confirmed by Commerce and Industry Minister Piyush Goyal. This landmark trade and economic partnership agreement, signed on March 10, 2024, aims to facilitate $100 billion in investments from EFTA nations—comprising Iceland, Liechtenstein, Norway, and Switzerland—over the next 15 years. The agreement has already received approval from the parliaments of all four EFTA countries, with a final objection window in Switzerland closing on July 10.

Details of the Trade Agreement

The trade agreement is expected to significantly reduce or eliminate import duties on a variety of European goods. This includes popular items such as Swiss watches, chocolates, and cut and polished diamonds, which will ultimately benefit Indian consumers and industries. Minister Goyal emphasized the importance of this agreement during his recent visit to Switzerland, where he engaged with business leaders and representatives. He expressed confidence that the Trade and Economic Partnership Agreement (TEPA) will be operational by September, enhancing trade relations between India and the EFTA countries.

Investment Opportunities and Business Engagement

During his visit, Goyal held discussions with over a dozen Swiss firms, many of which expressed a strong interest in investing in India. The sectors attracting attention include pharmaceuticals, cybersecurity, and machinery manufacturing. Goyal encouraged these companies to conduct their board meetings in India, allowing them to experience the country’s investment potential firsthand. He highlighted that 100% foreign direct investment is permitted in machinery manufacturing, which could help India reduce its reliance on machine imports from China.

Ongoing Trade Negotiations

In addition to the EFTA agreement, Goyal provided updates on other ongoing trade negotiations. India is currently in active discussions with several countries, including New Zealand, Chile, Peru, Oman, and the European Union. He hinted that a deal with the EU could be finalized sooner than anticipated, alongside a potential bilateral investment treaty. Goyal noted that the government’s efforts over the past 11 years have positioned India as a prime destination for global investment.

India’s Growing Global Presence

Reflecting on the achievements of the current government, Goyal stated that free trade agreements have played a crucial role in establishing India as a top choice for international business. He remarked that the global community increasingly recognizes India as an attractive place to do business, particularly in the services sector. The minister also pointed out the rise of global capability centers in India, with nearly 2,000 already in operation. He credited the success of the Production-Linked Incentive (PLI) scheme for significantly increasing local content in manufacturing, particularly in the air conditioning sector, from 20% to 65%.

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