India and the four-nation European Free Trade Association (EFTA), an intergovernmental grouping comprising Iceland, Liechtenstein, Norway and Switzerland, Sunday signed a trade pact that will see EFTA countries committing to invest $100 billion in India over 15 years.
This marks India’s first trade agreement with European countries. It comes after India signed trade deals with Australia and UAE in 2022. New Delhi is also negotiating a deal with the UK and the European Union that may be signed after the general elections. A comprehensive deal with Australia is also expected after the elections.
“It’s for the first time that we are inkling a free trade agreement (FTA) with a binding commitment to invest $100 billion in India from EFTA countries on the back of a solid foundation that has been laid in India. There are big opportunities in businesses in pharma sector, medical devices, food, R&D which can offer…This partnership will create 10 lakh jobs,” Commerce Minister Piyush Goyal said in a briefing.
#WATCH | Quoting PM Narendra Modi, Union Minister Piyush Goyal says, “… Despite structural diversities in many aspects, our economies possess complementarities that promise to be a win-win situation for all nations. With the opening up of enormous trading and investment… pic.twitter.com/yYLVsk0xyn
— ANI (@ANI) March 10, 2024
Prime Minister Narendra Modi, on the signing of the deal, said that the global leadership of EFTA countries will boost innovation and research and development (R&D) across diverse spheres such as digital trade, banking and financial services, transport and logistics, industrial machinery, bio technology, pharmaceuticals, chemicals, food processing and clean energy, and will open up new doors for collaborations.
“The culmination of efforts to finalise an innovative, well-balanced trade deal that reflects our respective developmental aspirations is commendable. One of the most pioneering free trade agreements ever concluded between our countries, the Economic Participation Agreement (TEPA) emphasizes our steadfast commitment to shared prosperity ..,” Modi said in a statement.
The EFTA-India TEPA was signed by Piyush Goyal, Minister of Commerce & Industry, Guy Parmelin, Swiss Federal Councillor and Head of the Federal Department of Economic Affairs, Education and Research; Bjarni Benediktsson, Minister of Foreign Affairs, Iceland; Dominique Hasler, Minister of Foreign Affairs, Liechtenstein and Jan Christian Vestre, Minister of Trade and Industry, Norway.
“EFTA countries gain market access to a major growth market. Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs. […] All in all, the TEPA will allow us to make better use of our economic potential and create additional opportunities for both India and the EFTA States,” Federal Councillor Guy Parmelin, speaking on behalf of the EFTA.
Government officials said that EFTA is also looking at joint ventures (JVs) in the above-mentioned sectors that will help India diversify imports away from China. that India could see investment flow into the pharma, chemical sectors, food processing and engineering sectors. Government officials said that EFTA is also looking at joint ventures (JVs) in the above-mentioned sectors that will help India diversity imports away from China.
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Currently, India’s imports of chemical products from China in FY23 alone stood at a massive $20.08 billion. It imported $3.4 billion worth of medical and bulk drugs worth nearly $7 billion from China, as per commerce and industry ministry data.
