India seals free trade agreement with four-nation European bloc

India signed a free trade pact withthe four-nation European Free Trade Association (EFTA) in New Delhi on Sunday (March 10). Prime Minister Narendra Modi hailed the deal as a 'watershed moment' for India, Iceland, Norway, Switzerland and Liechtenstein.

The signing of the pact, named the Trade and Economic Partnership Agreement (TEPA), was formalised three days after Prime Minister Narendra Modi's cabinet approved it on March 7.

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Four-nation bloc will invest $100bn in India over next 15 years

India will now lift most import tariffs on industrial products from Iceland, Norway, Switzerland and Liechtensteinin return for investment of $100 billion over 15 years.

The five signatories now must ratify this deal before it can take effect, with Switzerland planning to do so by 2025.

"It is a modern trade agreement, fair, equitable and win-win for all five countries," Indian trade minister Piyush Goyal said in a statement.

"TEPA emphasises our steadfast commitment to shared prosperity and our drive to cultivate a stonger, more inclusive partnership between India and EFTA, furthering the aspirations of our people," Prime Minister Narendra Modi said in an official statement.

PM Modi hails ‘well-balanced trade deal’

The pact had been under negotiations for the last 16 years, with the first leg of talks beginning in 2008 during the first term of Prime Minister Dr Manmohan Singh's government.

"The culmination of efforts to finalise an innovative, well-balanced trade deal that reflects our respective developmental aspirations is commendable," PM Modi added.

The delegation that signed the deal included Guy Parmelin, Swiss Federal Councillor and Head of the Department of Economic Affairs, Education and Research; Bjarni Benediktsson, Minister of Foreign Affairs of Iceland; Dominique Hasler, Minister of Foreign Affairs of Liechtenstein; and Jan Christian Vestre, Minister of Trade and Industry of Norway.

An official readout by the European Free Trade Association said: "The landmark agreement between India and EFTA is set to bring significant economic benefits, such as better integrated and more resilient supply chains, new opportunities for businesses and individuals on both sides leading to increased trade and investment flows, job creation, and economic growth."

What is the India-EFTA Trade and Economic Partnership Agreement (TEPA)?

The India-EFTA Economic Partnership Agreement (TEPA)includes 14 chapters, such as the ones focussed ontrade in goods, rules of origin, trade in services, investment promotion and cooperation, government procurement, intellectual property rights (IPRs), technical barriers to trade, and trade facilitation.

"The agreement enhances market access and simplifies customs procedures making it easier for Indian and EFTA businesses to expand their operations in the respective markets. The agreement further aims to facilitate and promote investment opportunities between the parties," an official EFTA readout said.

India has signed as many as 14 free trade agreements (FTAs) with different countries and groups of countries across the bloc.

Since 2014, India has signed three such agreements with Mauritius, the UAE, and Australia, and the latest edition in the list is EFTA.

India has inked trade deals with Sri Lanka, Bhutan, Thailand, Singapore, Malaysia, Korea, Japan, Australia, UAE, Mauritius and the 10-nation bloc ASEAN (Association of Southeast Asian Nations).

In addition, New Delhi is negotiating trade agreements with a number of its trading partners, including with the UK, Oman, the European Union (EU), Peru, and Israel.

Talks with Canada for a similar pact were put on hold due to Prime Minister Justin Trudeau's accusations related to New Delhi's alleged involvement in the Khalistani terrorist Hardeep Singh Nijjar’s killing and the consequent diplomatic fallout that followed.

According to an official cited by the Press Trust of India, talks with Oman are in the final stages. The 14th round of talks are underway between India and the UK.

The conclusion of talks between India and the UK is expected after general elections, as London and New Delhi areyet to iron out differences in key areas of goods and services.

(With inputs from agencies)