Swiss watches, chocolates to get cheaper as India-EFTA pact comes into force

Swiss products such as watches, chocolates, biscuits and wines are expected to get cheaper as the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) — comprising Iceland, Liechtenstein, Norway and Switzerland — entered into force on Wednesday.

The EFTA countries collectively rank among the global leaders in both merchandise and services trade. Together, India and the EFTA states represent a combined GDP of about $5.4 trillion, providing scope for deeper economic integration.

Commerce and Industry Minister Piyush Goyal lauded the agreement, calling it India’s first trade pact with an investment commitment. Under the agreement, EFTA has pledged to channel $50 billion in foreign direct investment (FDI) into India over the first 10 years, followed by another $50 billion in the next five years — a move expected to generate one million direct jobs.

“…We are confident that given India’s robust intellectual property laws and plans to strengthen them further, we will not only attract the committed $100 billion in investment but hope to draw much more,” Goyal said.

He added that the trade pact with EFTA will boost India’s services exports in IT, business, education and the audio-visual sector, creating new opportunities for the youth.

“TEPA will further strengthen our exports in machinery, textiles, marine products, coffee and more, offering wider access to premium European markets. Mutual Recognition Agreements in nursing, accountancy and architecture will empower Indian professionals through easier mobility,” Goyal said.

At the launch event attended by Goyal, Helene Budliger Artieda, Swiss State Secretary at the State Secretariat for Economic Affairs, and other dignitaries from India and EFTA nations, several companies announced investment plans. Roche Products committed to investing 1.5 billion Swiss francs in India over the next five years.

Spanning 14 comprehensive chapters, TEPA covers tariff reductions, services liberalisation, intellectual property rights and sustainable development. On trade, EFTA has opened 92.2 per cent of its tariff lines, covering 99.6 per cent of India’s exports, with full duty elimination on non-agricultural products and concessions on processed agricultural goods.

India has reciprocated by liberalising 82.7 per cent of its tariff lines, accounting for 95.3 per cent of EFTA’s exports, with over 80 per cent involving gold, while maintaining existing duties. Sensitive sectors such as pharmaceuticals, medical devices, dairy, soya, coal and broader agriculture remain protected.

Indian exporters stand to gain in processed foods, rice, guar gum, pulses, marine products, textiles, engineering goods, chemicals and machinery, while electronics and high-value engineering sectors will also benefit.

The agreement aims to facilitate and promote investment opportunities between the parties, creating an environment for Indian and EFTA businesses to innovate, expand and prosper. Trade in goods between the two sides has steadily increased over time, while trade in services has roughly doubled in the past decade. Both parties aim to substantially increase total two-way trade. The India-EFTA TEPA was signed on March 10 last year in New Delhi.