18-March-2024-Special-Article

INDIA-EFTA TRADE DEAL

India and the European Free Trade Association (EFTA) recently concluded the Trade and Economic Partnership Agreement (TEPA), marking a significant milestone in their bilateral relations.

Key Highlights of TEPA:

About TEPA:

• Finalized after a decade of negotiations, TEPA comprises 14 chapters focusing on market access, trade facilitation, investment promotion, and other provisions.
• Aims to increase foreign direct investments in India by USD 100 billion over 15 years, generating 1 million direct jobs.

Tariff Offers:

• EFTA offers tariff concessions on 92.2% of tariff lines, covering 99.6% of India’s exports.
• India offers concessions on 82.7% of tariff lines, covering 95.3% of EFTA exports, excluding sectors like dairy and coal.

Mutual Recognition:

• Includes provisions for Mutual Recognition Agreements in Professional Services, facilitating better integration in various sectors.

Market Integration:

• Provides an opportunity for Indian companies to access EU markets through Switzerland, fostering market integration.

Services Offered by EFTA:

• Offers improved access to services through digital delivery, commercial presence, and entry of key personnel.

European Free Trade Association (EFTA):

About EFTA:

• Founded in 1960, EFTA comprises Iceland, Liechtenstein, Norway, and Switzerland, promoting free trade among member states and their partners worldwide.

India-EFTA Relations:

• India is EFTA’s 5th-largest trading partner, with two-way trade valued at USD 18.65 billion in 2022-23.
• Switzerland is India’s largest trading partner within EFTA, followed by Norway.

India’s Relations with EFTA Nations:

India and Norway:

• Enjoy a cordial relationship since 1947, with mutual support in international forums.
• Collaboration in areas like blue economy and research, exemplified by joint initiatives and task forces.

India and Switzerland:

• Established diplomatic ties soon after India’s Independence, with significant trade and investment cooperation.
• Presence of numerous Swiss companies in India and Indian IT majors in Switzerland underscores bilateral economic relations.

India and Iceland:

• Strengthened ties since 2005, with support for India’s UNSC candidature and recent collaborations in renewable energy.
• Mutual cooperation agreements aim at exploring renewable energy sources and decarbonization initiatives.

India and Liechtenstein:

• Established diplomatic relations in 1993, with FDI inflow from Liechtenstein supporting India’s economic development.
• Continued engagement in trade and investment sectors, contributing to bilateral economic growth.

Conclusion:

The Trade and Economic Partnership Agreement between India and EFTA heralds a new era of cooperation, promising increased trade, investment, and economic growth.

As India deepens its ties with EFTA nations, mutual benefits in various sectors are anticipated, contributing to regional stability and prosperity.

Mains Question:

1. Discuss the significance of the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) in fostering bilateral relations and its potential impact on regional economic integration and growth. (150 WORDS)