New Delhi: India has signed a $100bn free trade agreement with four-member European Free Trade Association (EFTA) to boost trade and investments between the two regions.
The EFTA members are Iceland, Liechtenstein, Norway, and Switzerland and it took 21 rounds of talks over 16 years to clinch the broad-based Trade and Investment Agreement.
With India agreeing to lift import tariffs on industrial products from these countries over a period of time in return for the investment over 15 years under this deal, domestic customers can soon access high-quality Swiss products such as watches, chocolates, biscuits, and clocks at lower prices. The implementation of the agreement is expected to take around a year due to the elaborate ratification process across various countries involved, according to reports.
India also expects that the pact, following deals with the UAE and Australia, will boost exports of pharmaceuticals, garments, chemicals and machinery while attracting investments in automobiles, food processing, railways and the financial sector. It is likely to create one million direct jobs in India.
India will lift, or partially remove, very high customs duties on 95.3 percent of industrial imports from Switzerland, excluding gold, either immediately or over time, the Swiss government said in a statement.
According to an analysis of the documents by economic think tank Global Trade Research Initiative (GTRI), India has allowed tariff concession to a number of products imported from Switzerland under the agreement. These include seafood like tuna and salmon; fruits such as olives and avocados; coffee capsules; different oils like cod liver and olive oil, a variety of sweets and processed foods including chocolate and biscuits. Smartphones, bicycle parts, medical equipment, clocks, watches, medicines, dyes, textiles, apparel, iron and steel products, and machinery equipment are also covered under this deal.
Tariffs on cut and polished diamonds will also be reduced from 5 per cent to 2.5 per cent in five years after the implementation of the agreement. “Wines priced between $5 and less than $15 will see a duty reduction from 150 per cent to 100 per cent in the first year, then decreasing gradually to 50 per cent over 10 years,” GTRI Founder Ajay Srivastava told PTI.
For wines costing $15 or more, he said, the initial duty cut is from 150 per cent to 75 per cent, eventually reducing to 25 per cent after 10 years, he added.
The GTRI, however, warned that India is likely to keep facing difficulties in exporting farm produce to Switzerland due to a complex web of tariffs, quality standards, and approval requirements. Switzerland’s policy of tariff-free entry for all industrial goods from any country will also not benefit Indian companies.
