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For the first time ever India and the European Free Trade Association (EFTA), along with Iceland, Liechtenstein, Norway, and Switzerland, signed their first-ever free-trade agreement (FTA) on Sunday. This historic pact includes a remarkable legal commitment, marking the first time in FTA history that a binding investment commitment has been incorporated. India stands to gain a significant investment of $100 billion over 15 years from the EFTA bloc.
Established in 1960 as an alternative trade bloc, the European Free Trade Association consists of Iceland, Liechtenstein, Norway, and Switzerland. Even though these countries are not members of the European Union, they benefit from access to its single market through different agreements. The agreement with EFTA is set to bring in $100 billion in investment from private companies into India, creating around 1 million jobs. The agreement details an assurance to invest $50 billion in the initial 10 years, with an extra $50 billion in the following 5 years, not including Foreign Portfolio Investment (FPI).
A wide variety of products, such as Swiss chocolates, biscuits, seafood, Mediterranean fruits, coffee, oil, sweets, processed foods, and wine, are expected to have their import tariffs slashed. Consumers in India can anticipate these reductions. The agreement specifies that there will be a decrease in taxes of the same amount each year for a period of seven years. Particularly significant is the fact that the present import tax of thirty per cent on chocolate and products related to chocolate in India is going to be reduced. Furthermore, Switzerland turns out to be a significant partner, as this country is involved in 91% of the products that are traded. In the first year, the import duty on Swiss wines will reduce from 150% to 100%, and it will eventually approach 50% over the course of the next decade. The CIF range for Swiss wines is between $5 and $15. The duty will experience a rapid decline. In addition to boosting growth and employment opportunities, this historic free trade agreement (FTA) heralds in a new age of economic partnership, which will result in a reduction in costs for a number of highly sought-after products in the Indian market.
