New Delhi: India and a bloc of four European countries signed a free trade agreement on Sunday (March 10) in which the bloc promises investment of $100 billion in India in return for relaxed tariffs.
Talks over the trade deal between India and the European Free-Trade Association (EFTA) – comprising Switzerland, Norway, Iceland and Liechtenstein – began in 2008 and have involved 21 rounds of negotiations.
The $100 billion investment into India’s economy will take place over a time period of 15 years, during which the creation of about ten lakh jobs will be facilitated, Union commerce minister Piyush Goyal said today according to the Indian Express.
This investment will come mostly from the private sector, Bloomberg cited Goyal as saying. The news agency previously reported that it would likely be targeted at manufacturing projects.
According to the deal, EFTA countries will face reduced tariffs for processed foods and beverages as well as for electrical machinery. Their pharmaceutical and medical devices industries will also benefit, Bloomberg’s report said.
It added that the deal will liberalise access for Indian products such as rice and will facilitate the smoother movement of Indian professionals into the bloc’s countries.
But exporting farm produce to Switzerland may remain difficult due to tariffs, quality standards and approval requirements, Reuters reported citing analysts.
Switzerland will benefit from reductions of high tariffs on around 95% of industrial goods it exports to India – excluding gold – either immediately or in a phased manner.
Goods from the country that are slated to become cheaper in India include high-end watches and chocolates, the Press Trust of India reported.
Norway’s industries minister Jan Christian Vestre said that while companies from his country currently face up to 40% import taxes on certain goods, the trade deal secures “nil import taxes on nearly every Norwegian good”, Reuters quoted him as saying.
All five countries have to ratify the deal before it takes effect. According to Bloomberg, Switzerland’s government said it will begin this process immediately so that the deal can be approved by 2025.
India is the EFTA’s fifth-largest trading partner and two-way trade between the two amounted to $25 billion according to calculations by the Union government.
The deal’s announcement comes weeks ahead of the general elections.
Prime Minister Narendra Modi’s campaign has emphasised high GDP growth over the last quarter and the Union government says it aims to achieve annual exports of $1 trillion by 2030.
With inputs from DW.
