India inks free trade deal with European EFTA bloc; here are its five benefits
Upstox
2 min read • Updated: March 11, 2024, 2:48 PM
Summary
India has signed a free trade deal with four-member European Free Trade Association (EFTA) to receive $100 billion as foreign direct investment in the next 15 years and create one million jobs.
India has inked a free trade agreement (FTA) with European Free Trade Association (EFTA) countries comprising Iceland, Switzerland, Norway and Liechtenstein to bring $100 billion in foreign direct investments in India in the next 15 years and create one million jobs.
The Trade and Economic Partnership Agreement (TEPA) will reduce tariffs for goods that bloc members export to India. The agreement consists of 14 chapters with the main focus on "market access related to goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access on services, intellectual property rights, trade and sustainable development and other legal and horizontal provisions."
Union Commerce Minister Piyush Goyal said TEPA is a modern and ambitious trade agreement. He stated that this is the first time that India has signed an FTA with four developed countries- a crucial economic bloc in Europe.
"For the first time in the history of FTAs, the binding commitment of $100 bn investment and 1 million direct jobs in the next 15 years has been given. The agreement will be a boost to Make in India and provide opportunities to the young and talented workforce. The FTA will provide a window to Indian exporters to access large European and global markets," he said.
Switzerland's State Secretary for Economic Affairs, Helene Budliger Artieda, also asserted that India will be the premier manufacturing and service hub of the world.
How will the free trade pact impact Indians
- The trade deal will phase out custom duties on imported goods, making Swiss products like chocolates, biscuits, watches and clocks cheaper.
- Due to tariff concessions, coffee, sweets, oils, processed foods and Mediterranean fruits will cost less.
- Wines in price range of $5 to $15 will witness duty reduction.
- Smartphones, medical equipment, bicycle parts, dyes, medicines, apparel, textiles, machinery equipment and iron and steel products will also see a price drop.
- Cut and polished diamonds will become cheaper as the tariff will be reduced to 2.5% from 5% in five years after the trade deal.
There is no tariff concession on gold imports. While India has given a 1% concession on the bound rate of 40%, the effective duty remains at 15%.