National Desk, 10th March: In a significant stride for India’s trade landscape, the nation has officially inked a free trade agreement (FTA) with the European Free Trade Association (EFTA) on Sunday. This pivotal agreement marks a crucial milestone in India’s ongoing trade negotiations, heralding a new era of collaboration.
Comprising Iceland, Liechtenstein, Norway, and Switzerland, the EFTA has extended duty-free market access for a spectrum of Indian exports, encompassing animal products, fish, processed food, and vegetable oils. Mint reports indicate that the EFTA nations have also proposed a substantial $100 billion investment in India over 15 years, potentially generating around a million jobs. These negotiations, which commenced in 2008, signify a long-awaited breakthrough in bilateral trade relations.
FTA negotiations with Oman and the UK are reportedly nearing completion, further bolstering India’s trade engagements on the global stage.
The framework of the deal, sealed at Bharat Mandapam, promises immediate duty-free access, positioning it as the most favorable offer among India’s current FTA partners. Additionally, the EFTA nations have pledged to establish offices in India, streamlining operations for their companies in navigating the Indian market.
However, amid the positive strides, certain trade experts voice apprehensions regarding the potential impact on India’s trade balance. Notably, 98% of India’s exports to Switzerland fall under the category of industrial goods, entering at zero tariffs.
Ajay Srivastava, head of the Global Trade Research Initiative (GTRI), highlights concerns that India’s agricultural exports may not witness a substantial increase due to stringent quality standards and non-tariff barriers. The trade deficit with EFTA, particularly with Switzerland, remains a focal point for India. In the fiscal year 2023, India’s imports from EFTA surpassed exports, resulting in a trade deficit of $14.8 billion.
In the financial year 2024 (April 2023-January 2024), India’s exports to EFTA countries totaled $1.87 billion, encompassing chemicals, pharmaceuticals, apparel, pearls, and precious and semi-precious stones. Conversely, India imported goods valued at $20.45 billion from EFTA countries in 2023, including pearls, precious metals, and coins valued at $16.7 billion.
The FTA with EFTA marks a significant stride in India’s global trade strategy, offering both opportunities and challenges. As India continues to navigate international trade relations, the ramifications of this agreement on the broader economy warrant vigilant observation.
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