India has signed a trade agreement with four-member European trade bloc European Free Trade Association (EFTA), which includes Norway, Switzerland, Iceland, and Liechtenstein. The deal involves a commitment of $100 billion (€91 billion) in investments and creating one million direct jobs in India in the next 15 years.
The India-EFTA Trade and Economic Partnership Agreement (TEPA) was signed during a ceremony in New Delhi after 16 years of negotiations.
This “marks a new turn and watershed moment in the bilateral relationship between India and [European Free Trade Association] countries of Switzerland, Iceland, Norway and Liechtenstein,” India Prime Minister Narendra Modi said in comments shared on X.
Prime Minister Narendra Modi’s ambitious goal of achieving $1 trillion in annual exports by 2030 is a driving force behind these initiatives.
“The landmark agreement between India and EFTA is set to bring significant economic benefits, such as better integrated and more resilient supply chains, new opportunities for businesses and individuals on both sides leading to increased trade and investment flows, job creation, and economic growth,” an EFTA communique said.
Piyush Goyal, India’s Minister for Commerce and Industry, hailed the agreement as a historic milestone in the partnership between India and the EFTA countries.
Terms of agreement
Under the terms of the agreement, India will gradually eliminate or significantly reduce import tariffs on 95.3% of industrial products from Switzerland, except for gold.
Similarly, Norwegian companies will benefit from reduced import taxes, with many goods enjoying zero tariffs.
“Norwegian companies exporting to India today meet high import taxes of up to 40% on certain goods,” Industry Minister Jan Christian Vestre said. “With the new deal, we have secured nil import taxes on nearly every Norwegian good.”
The deal opened up access to a vast market of 1.4 billion people for the EFTA nations, providing them with significant opportunities for growth and expansion.
In recent years, India has signed trade agreements with Australia, the United Arab Emirates, and is on the verge of finalizing one with the United Kingdom.
By fostering closer economic ties with key partners, India aims to diversify its export markets and boost its economic growth.
Formed in 1960 as a counterweight to the EU, the EFTA has signed about 30 trade agreements with some 40 countries and territories outside the EU. Meanwhile, India is EFTA’s fifth-largest trading partner after the EU, the United States, the UK and China, with total two-way trade of $25bn in 2023, its Ministry of Trade estimated.