India & European Free Trade Association (EFTA)

Why in News?

Recently, the Commerce and Industry Minister said that the Free Trade Agreement between India and the four-nation European bloc EFTA will be implemented from October 1.

• EFTA - It is an intergovernmental organisation established to promote free trade and economic integration, benefiting its four Member States.
• Member states - Iceland, Liechtenstein, Norway, and Switzerland, as well as their trading partners worldwide.

Outcomes of EFTA agreement

• India secured a follow-up commitment in the EFTA categories

• Reduction of duties - India will phase out customs duties under the trade pact on these goods over 10 years, allowing several products, such as Swiss watches, chocolates, and cut and polished diamonds.

Benefits

• Strategic Investment Timeline – The bloc will invest $100 billion in 15years, consisting of two phases
  • First phase - $50 billion within 10 years after the implementation of the agreement.
  • Second phase - $50 billion in the next five years.
• Job creation on a large scale - It facilitates the creation of 1 million direct jobs in India.
• Access to high-quality products - Domestic customers will have access to top-grade Swiss products, including watches, chocolates, biscuits, and clocks, at lower prices.
• Boost to services sector - India has identified 105 sub-sectors for the EFTA, including legal, audio-visual, R&D, business services, computer services, accounting, auditing, distribution, and Health services.
• Entry into the EU market - Over 40% of Switzerland’s global services exports are directed to the EU, making it a strategic gateway for Indian firms to expand their presence in the European market.

Reference

The Hindu| India vs European Free Trade Association (EFTA)