News Brief
India, EFTA Ink $100 Billion Free Trade Pact: Here Are The Key Highlights
Union Minister Piyush Goyal with EFTA officials (Pic Via Twitter)
India and the European Free Trade Association (EFTA), consisting of Switzerland, Iceland, Norway, and Liechtenstein, have signed the Trade and Economic Partnership Agreement (TEPA) on Sunday (10 March).
This agreement, approved by the Prime Minister Narendra Modi-led Union Cabinet, marks a significant step in India's trade policy, establishing its first Free Trade Agreement (FTA) with these four developed nations.
EFTA is an inter-governmental organization set up in 1960 for the promotion of free trade and economic integration for the benefit of its four Member States.
Commerce and Industry Minister Piyush Goyal, speaking at the signing ceremony, hailed the TEPA as a "modern and ambitious Trade Agreement".
"For the first time, India is signing FTA with four developed nations - an important economic bloc in Europe. For the first time in history of FTAs, binding commitment of $100 bn investment and 1 million direct jobs in the next 15 years has been given," Goyal said.
The agreement comprises of 14 chapters with 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.
Here are the key highlights of the agreement:
EFTA has committed to promote investments with the aim to increase the stock of foreign direct investments by $100 billion in India in the next 15 years, and to facilitate the generation of 1 million direct employment in India, through such investments. The investments do not cover foreign portfolio investment.
For the first ever time in the history of FTAs, a legal commitment is being made about promoting target-oriented investment and creation of jobs.
EFTA is offering 92.2 per cent of its tariff lines which covers 99.6 per cent of India’s exports. The EFTA’s market access offer covers 100 per cent of non-agri products and tariff concession on Processed Agricultural Products (PAP).
India is offering 82.7 per cent of its tariff lines which covers 95.3 per cent of EFTA exports of which more than 80 per cent import is Gold. The effective duty on Gold remains untouched. Sensitivity related to PLI in sectors such as pharma, medical devices & processed food etc. have been taken while extending offers. Sectors such as dairy, soya, coal and sensitive agricultural products are kept in exclusion list.
TEPA would stimulate India's services exports in sectors of its key strength/interest such as IT services, business services, personal, cultural, sporting and recreational services, other education services, audio-visual services etc.
Services offers from EFTA include better access through digital delivery of Services (Mode 1), commercial presence (Mode 3) and improved commitments and certainty for entry and temporary stay of key personnel (Mode 4).
TEPA has provisions for Mutual Recognition Agreements in Professional Services like nursing, chartered accountants, architects etc.
Commitments related to Intellectual Property Rights in TEPA are at TRIPS level. The IPR chapter with Switzerland, which has high standard for IPR, shows our robust IPR regime. India’s interests in generic medicines and concerns related to evergreening of patents have also been fully addressed.
India has signalled its commitment to Sustainable development, inclusive growth, social development and environmental protection.
TEPA will empower Indian exporters access to specialised inputs and create conducive trade and investment environment. This would boost exports of Indian made goods as well as provide opportunities for services sector to access more markets.
TEPA provides an opportunity to integrate into EU markets. Over 40 per cent of Switzerland’s global services exports are to the EU. Indian companies can look to Switzerland as a base for extending its market reach to EU.
TEPA will give impetus to “Make in India” and Atmanirbhar Bharat by encouraging domestic manufacturing in sectors such as Infrastructure and Connectivity, Manufacturing, Machinery, Pharmaceuticals, Chemicals, Food Processing, Transport and Logistics, Banking and Financial Services and Insurance.
TEPA would accelerate creation of large number of direct jobs for India’s young aspirational workforce in next 15 years in India, including better facilities for vocational and technical training. TEPA also facilitates technology collaboration and access to world leading technologies in precision engineering, health sciences, renewable energy, Innovation and R&D.
