India and EFTA Forge Historic TEPA: $100 Billion Boost in Investments Expected

India recently inked a Free Trade Agreement with the European Free Trade Association (EFTA), comprising Norway, Switzerland, Iceland, and Liechtenstein.

Anticipated to attract $100 billion in investments over the next 15 years, the Trade and Economic Partnership Agreement (TEPA) was hailed by Prime Minister Narendra Modi as a “new turn” and a “watershed moment.”

This milestone represents India’s fourth agreement of this nature since 2014, following similar pacts with Mauritius, the United Arab Emirates (UAE), and Australia.

The agreement will address various trade barriers, promote investment, enhance market access for services, protect intellectual property rights, and include legal and horizontal provisions.

EFTA, a significant regional group in Europe alongside the EU and the UK, presents opportunities for international trade growth. Switzerland stands as India’s primary trading partner within EFTA, followed by Norway. 

Key highlights of the agreement: 

This groundbreaking agreement includes legal commitments to target-oriented investment and job creation, a first in the history of FTAs.

EFTA offers 92.2% of its tariff lines, covering 99.6% of India’s exports, while India provides access to 82.7% of its tariff lines. Sensitivity in sectors like pharma and processed food is considered, with exclusions for dairy, soya, coal, and certain agricultural products.

TEPA focuses on services exports, particularly in IT services, business services, and education services. EFTA’s services offers include improved access through digital delivery, commercial presence, and commitments for entry and temporary stay of key personnel.

Provisions for Mutual Recognition Agreements in Professional Services and commitments related to Intellectual Property Rights at TRIPS level are integral parts of TEPA. India’s commitment to sustainable development and environmental protection is emphasized.

TEPA aims to enhance transparency, efficiency, and harmonization of trade procedures, empowering Indian exporters with specialized inputs and creating a conducive trade and investment environment. It provides an opportunity to integrate into EU markets and encourages “Make in India” and Atmanirbhar Bharat, fostering domestic manufacturing across various sectors.

The agreement is expected to accelerate the creation of a significant number of direct jobs in India over the next 15 years, while also facilitating technology collaboration and access to world-leading technologies in various industries.

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