European Free Trade Association (EFTA)

Why in News?

India recently establishes European Free Trade Association (EFTA) desk to boost trade with European nations.

India and the EFTA bloc signed a free trade agreement (FTA) recently to boost trade and investment ties.

It is a regional trade organization set up for the promotion of free trade and economic integration between its members, within Europe and globally.
Established by - Signing a Convention in Stockholm on 4 January 1960.

Founding Members of EFTA are Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom.

Member States - Iceland, Liechtenstein, Norway and Switzerland.
Headquarters – Geneva.
Governing Body - EFTA Council.
It usually meets 8 times a year at Ambassadorial level (Heads of Permanent Delegations to EFTA) and once a year at Ministerial level.
Each Member State is represented, and decisions are taken by consensus. The Member States take turns to chair the Council, rotating yearly.
Features - The Council manages relations between the EFTA States themselves under the EFTA Convention.
It adopts decisions to reflect legislative developments in the EEA (Iceland, Liechtenstein, and Norway) Agreement and in the Switzerland-EU bilateral agreements.
EFTA’s worldwide network of free trade and partnership agreements with third countries.
Significance - EFTA has one of the world’s largest free trade networks, with 31 agreements covering 42 partner countries outside the EU.
More than 80% of EFTA’s merchandise trade is currently covered by the trade bloc’s preferential agreements.
India-EFTA two-way trade was about $24 billion in 2023-24 against $18.65 billion in 2022-23.

Switzerland is the largest trading partner and investor in India followed by Norway in the bloc.

India received $10.72 billion in foreign direct investment from Switzerland during April 2000 and September 2024.
India- EFTA Agreement – The pact is also known as Trade and Economic Partnership Agreement (TEPA).
The deal is set to come into effect in the next four-six months after the 4 nations receive necessary Parliamentary approvals.
It comes against the backdrop of an investment commitment made by EFTA nations under the trade agreement $50 billion investment in India within 10 years of the agreement.
- Taking into effect and an additional $50 billion in the next 5 years.
The investment is expected to facilitate the creation of 1 million direct jobs in India in 15 years.
The dedicated platform will act as a centralized support mechanism for EFTA companies looking to expand in India.
It aims to fast track processes to make it easier for companies to do business, ensure seamless flow of capital, and navigate areas of concerns.

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