India and the European Free Trade Association (EFTA) comprising four European countries inked a landmark trade agreement on Sunday, March 10th. Central Minister Piyush Goyal announced that over the next 15 years, EFTA countries have committed to investing $100 billion in India. He estimates the deal will generate employment for one million citizens.
EFTA member countries include Iceland, Liechtenstein, Norway, and Switzerland. The recent pact, the minister stated, will significantly empower companies related to green and wind energy, pharmaceuticals, healthcare equipment, and the food industry, creating a major opportunity for employment and investment by EFTA nations. Goyal highlighted that the agreement offers prospects for all involved nations and will be mutually beneficial.
Conversations Began in 2008
Dialogues for the initial deal with these countries commenced in 2008. After 13 rounds of talks, the discussions were paused in 2013. Talks resumed in October 2016 and, after 21 rounds over 16 years, the deal has been solidified. The current trade volume between EFTA and India stands at $18.66 billion (2022-23), with Switzerland and Norway being the largest trading partners.
Highlights of the Deal
This deal, spanning 15 years, promises a $100 billion investment. An official stated that India, following the agreement, sought a $50 billion investment over the next decade, with a subsequent $50 billion from the bloc's members in the proceeding five years. This deal ensures that millions of young individuals will secure employment.
Exclusions from the Deal
India is also set to reduce import duties on various goods for these nations. Nevertheless, sectors such as agriculture, soy, dairy, and coal have been omitted from the deal. Similarly, Indian markets have not been opened to sectors associated with the PLI scheme. Following the deal's finalization, approval from the parliaments of the respective countries is anticipated, after which free trade with India will commence.
What Will Get Cheaper?
Upon the initiation of free trade, import fees from these countries to India will decrease, leading to reduced prices for goods such as Swiss chocolate, watches, and biscuits, which are popular in the Indian market. This deal is projected to make such items more affordable.
India's Free Trade Negotiations with Other Nations
India is also engaged in trade negotiations with other countries and groups, such as the UK, the European Union, and Oman. Reports suggest a potential trade agreement with the UK may be finalized post their elections. However, India is not hastening the talks and is currently discussing various trade deal aspects with the UK, including reductions in duties for automobiles, Scotch whisky, chocolate, and meat products.
