India-European free trade pact to roll out today 

A free trade agreement between India and the European Free Trade Association (EFTA) will take effect on Wednesday with the commitment of $100 billion foreign direct investment in India in 15 years. The pact, officially known as Trade and Economic Partnership Agreement (TEPA), was signed on March 10 last year in New Delhi with EFTA, comprising Switzerland, Norway, Iceland and Liechtenstein.

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 but maintaining the existing duty structure. Sensitive sectors like 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, with electronics and high-value engineering sectors also benefiting.

Domestic customers will get access to high-quality Swiss products such as watches, chocolates, biscuits and clocks at lower prices as India will phase out customs duties under the trade pact on these goods over 10 years.

EFTA has committed to channelling $50 billion in FDI within the first 10 years, followed by another $50 billion in the next five. This would facilitate one million direct job creation.

EFTA is one of the three groups in Europe (EU, UK & EFTA). India has signed an FTA with the UK recently and is discussing a trade pact with the European Union.

In services, India has offered 105 sub-sectors, while EFTA countries have offered commitments in 128 (Switzerland), 114 (Norway), 107 (Liechtenstein), and 110 (Iceland) sub-sectors. TEPA enables mutual recognition agreements (MRAs) in professional services such as nursing, chartered accountancy and architecture. It presents stronger opportunities in IT, business services, cultural and recreational services, education and audio-visual services.

According to reports, India's exports to the EFTA bloc rose by 1.22 per cent to $1.97 billion in 2024-25 from $1.94 billion in 2023-24. Imports jumped to $22.44 billion in 2024-25 from $22.05 billion in 2023-24. The two-way trade stood at $24.41 billion in the last fiscal. The trade gap is in the favour of the bloc with a $20.47 trade deficit in 2024-25.

The biggest trading partner of India in the bloc is Switzerland (exports $1.47 billion and imports $21.8 billion in 2024-25), which already has zero customs duties on almost all industrial goods.

India has low trade volumes with the remaining three countries - Iceland (exports $66 million and imports $11 million in 2024-25), Liechtenstein (exports $0.41 million and imports $1.82 million in 2024-25), and Norway (exports $425 million and imports $632.8 million in 2024-25).