Prelims - Current events of National & International importance.
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.
- India’s biggest trading partner – Switzerland.
- India-EFTA two-way trade - $24.4 billion in 2024-25.
- Tariff lines or product categories - Offering 82.7% by India, which cover 95.3% of EFTA exports, of which more than 80% of imports are gold.
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Outcomes of EFTA agreement
- India secured a follow-up commitment in the EFTA categories
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Countries
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EFTA sub-sectors
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Switzerland
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128
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Norway
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114
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Iceland
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110
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Liechtenstein
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107
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- 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)
