Know what is the In thing now

EFTA Agreement: A Historic Milestone After 16 Years of Negotiation

EFTA agreement between India and Europe

The EFTA agreement talks were finally inked after almost 16 years of negotiation, which included a stand-off in November 2013. This agreement was reached after 21 rounds of talks were completed since resuming negotiations in October 2016. Significant it is to mention that this is the first occasion in FTAs historical record where a trade-related labour commit is part of the treaty.

What does it consist of?

For those unfamiliar, the European Free Trade Association (EFTA) consists of Iceland, Liechtenstein, Norway, and Switzerland. The recent $100 billion EFTA deal with India entails waiving basic customs duties on Swiss-made chocolates, wristwatches, and pocket watches. Under the agreement, these tariffs will be phased out over a seven-year period. Presently, India imposes a 30% import duty on chocolates and a 20% duty on most Swiss watch variants. Upon completion of the ratification process by all parties, the agreement will become operational.

How does it benefit India?

Switzerland and Norway accounted for the largest shares of the $18.66 billion trade between India and the EFTA countries in 2022–2023. India’s primary exports to EFTA nations include drugs, pharmaceuticals, jewelry, gems, and chemicals, while these countries primarily import gold, watches, pharmaceuticals, ships, and boats. Switzerland, India’s leading EFTA trading partner, represents 91% of bilateral merchandise trade. Additionally, India has extended discounts on Swiss wines with shipping prices ranging from $5 to $15, with duties being gradually reduced over a decade for those priced above $15. The EFTA agreement includes tariff concessions on various Swiss products, including seafood, fruits, coffee, oils, sweets, processed foods, and wine. This will result in lower prices for these goods in Indian markets, making them more accessible to consumers.

In addition to duty concessions on processed agricultural products, the agreement grants duty-free access to nearly all domestic industrial goods in EFTA countries. Notably, Switzerland has already eliminated tariffs on most industrial goods as of January 1. The Indian government has ensured considerations for sensitive sectors such as pharmaceuticals, medical devices, and processed foods, while certain agricultural products remain excluded from tariff concessions.

You might also be interested in

Get the word out!