India has signed a trade agreement with the European Free Trade Association (EFTA) worth $100 billion and will run for 15 years,
The deal will have New Delhi lifting the majority of import tariffs on industrial products from four European countries. The economic pact was signed on Sunday and concludes nearly 16 years of negotiations between officials.
India-EFTA Trade Agreement
It also follows trade pacts made over the last two years with Australia and the United Arab Emirates (UAE). Officials said that another agreement, this time with Britain, is already in its final stages. This comes as Indian Prime Minister Narendra Modi seeks to boost annual exports to $1 trillion by 2030.
The agreement will have the EFTA, which comprises Iceland, Liechtenstein, Norway, and Switzerland, invest $100 billion over 15 years to support India's market of roughly 1.4 billion people. In exchange, New Delhi will, or at least partially, remove extremely high customs duties on 95.3% of industrial imports from Switzerland, excluding gold. This will happen either immediately or over time, according to Reuters.
In a statement, Norwegian Industry Minister Jan Christian Vestre said that the nation's companies that are exporting to India currently meet high import taxes of up to 40% on certain goods. He argued that with the new trade deal, they have secured nil import taxes on almost every single Norwegian good.
The trade deal also covers some new elements, including intellectual rights and gender equality. During a press conference, Goyal said that it is a modern trade agreement, adding that it is fair, equitable, and a win-win for all five countries that are involved.
The five signatories will have to ratify Sunday's deal before it can be implemented and Switzerland plans to do so by 2025. The news of the agreement comes ahead of general elections that are scheduled for May in India where Modi is seeking a record third term.
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$100-Billion Investment
The Indian trade minister also said that the India-EFTA Trade and Economic Partnership Agreement (TEPA) marks a "historic milestone in our growing partnership." He added that the new deal will pave the road for mutual growth and prosperity, said Aljazeera.
Under the trade deal, Indian agricultural exporters will be able to take advantage of liberalized trade rules in the form of tariff concessions in the European bloc. Additionally, professionals will be able to take up jobs in the EFTA zone.
The deal comes as India is EFTA's fifth-largest trading partner after the European Union, the United States, the United Kingdom, and China. The Ministry of Trade estimated that the two-way trade was worth roughly $25 billion last year.
While the deal marks a historic moment, the investment is not guaranteed as the funds will have to come from the private sector. The governments of the EFTA nations will act as facilitators to promote investment and will also open an office in India.
When it comes to milestones, the starting point is $10.7 billion, which is the investment level in 2022. However, there are no yearly milestones as it is unlikely that it would be linear and officials expect a lagging trade growth, according to the Indian Times.
