India has signed a historic Trade and Economic Partnership Agreement (TEPA) with four European countries—Switzerland, Iceland, Norway, and Liechtenstein—forming the European Free Trade Association (EFTA). This agreement is expected to provide India access to 99.6% of EFTA’s market, generating $100 billion in foreign direct investment (FDI) and creating 1 million direct jobs over the next 15 years. With strong commitments from both sides, the deal aims to enhance India’s global market position and reinforce initiatives like “Make in India” and “Atmanirbhar Bharat.”
Key Highlights of the TEPA
Trade Access and Investment Commitments
The TEPA grants India extensive market access, with EFTA offering 92.2% of its tariff lines, covering 99.6% of Indian exports. India, in return, will provide tariff concessions on 82.7% of its goods. The agreement sets a $100 billion target for FDI over the next 15 years, with $50 billion expected in the first 10 years and an additional $50 billion in the next five.
Job Creation and Economic Growth
The pact is set to create 1 million direct jobs in India, supporting its young workforce. This aligns with India’s projected economic rise, with expectations to become the third-largest economy in the world in the next 3-4 years. The agreement also focuses on promoting sectors like IT, pharmaceuticals, chemicals, renewable energy, and banking.
Enhanced Services and Technology Collaboration
TEPA will expand India’s service exports, particularly in IT, business, and educational services, by improving access to EFTA countries. Additionally, the deal facilitates technological collaboration, offering India access to advanced technologies in precision engineering, health sciences, and renewable energy.
Sustainability and Intellectual Property Rights
The agreement includes commitments to sustainable development and social growth, with strong intellectual property provisions aligning with international standards. India’s concerns regarding patent issues, such as generic medicines and evergreening, have been addressed.
Future Prospects and Trade Expansion
As India strengthens its trade ties with EFTA countries, this agreement sets the stage for deeper economic integration with Europe. The expected surge in FDI will stimulate domestic manufacturing, contributing to India’s goals of self-reliance and boosting its global competitiveness.
Moving Forward: Expediting Implementation
The visit of Commerce Secretary Sunil Barthwal to Norway and plans for further discussions with Switzerland aim to expedite the implementation of TEPA. These efforts are crucial to realizing the full potential of the agreement, which could reshape India’s trade and investment landscape in the coming years.
Summery of the news
| Why in News | Key Points |
|---|---|
| India signs TEPA with EFTA | – EFTA: Switzerland, Iceland, Norway, Liechtenstein. – TEPA signed in March 2024. – Investment target: $100 billion over 15 years. – Job creation: 1 million direct jobs in India. – Market access: 99.6% of EFTA market for India. – India’s tariff offers: 82.7% of tariff lines. – FDI sectors: Infrastructure, IT, Pharmaceuticals, Renewable Energy. |
| Key Agreement Details | – TEPA includes 14 chapters: market access, investment promotion, IPR, services, sustainable development, etc. – India’s commitment: Services exports in IT, business, education, and cultural sectors. |
| Key Personalities | – Sunil Barthwal: Commerce Secretary, led delegation to Norway. – Piyush Goyal: Commerce Minister, to meet Swiss investors. |
| Commitments from EFTA | – 92.2% tariff lines offered by EFTA. – Concessions on non-agri products and processed agricultural goods. |
| Additional Context | – India’s economy: Expected to become the third-largest in the next 3-4 years. – Impact on “Make in India” and “Atmanirbhar Bharat”. |
| Agreement Impact | – Technology collaboration: Precision engineering, renewable energy, R&D. – Vocational training: Focus on skill development for young workforce. |
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