New Delhi – In a significant development for international trade, India has officially inked the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA), consisting of Switzerland, Iceland, Norway, and Liechtenstein. The agreement was formally signed today, on March 10, 2024.
The Union Cabinet, chaired by Prime Minister Narendra Modi, approved the TEPA with EFTA States, marking a significant milestone in India’s pursuit of enhanced economic cooperation with developed nations in Europe. The EFTA is an intergovernmental organization established in 1960 to promote free trade and economic integration among its four member states.
Mr. Piyush Goyal, Minister of Commerce and Industry, Food and Consumer Affairs, and Textiles, expressed enthusiasm about TEPA’s modern and ambitious nature. He highlighted the historical significance of this agreement as India ventures into free trade with four developed nations simultaneously. “TEPA is a modern and ambitious Trade Agreement. For the first time, India is signing FTA with four developed nations – an important economic bloc in Europe. For the first time in history of FTAs, binding commitment of $100 bn investment and 1 million direct jobs in the next 15 years has been given. The agreement will give a boost to Make in India and provide opportunities to young & talented workforce. The FTA will provide a window to Indian exporters to access large European and global markets.”
The TEPA comprises 14 chapters, addressing various aspects such as market access for goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, and intellectual property rights. The agreement also includes provisions related to trade and sustainable development.
The agreement covers 92.2 percent of EFTA’s tariff lines, including 99.6 percent of India’s exports. India, in turn, is offering 82.7 percent of its tariff lines, covering 95.3 percent of EFTA exports. Notably, sensitivity in sectors such as pharma, medical devices, processed food, and others was considered in the negotiation process.
TEPA is expected to stimulate India’s services exports, particularly in sectors like Information Technology, business, education, and audio-visual services. The agreement includes provisions for Mutual Recognition Agreements in Professional Services, such as nursing, chartered accountancy, and architecture.
Additionally, TEPA underscores India’s commitment to sustainable development, inclusive growth, social development, and environmental protection. It is anticipated to foster transparency, efficiency, simplification, harmonization, and consistency of trade procedures.
The agreement is poised to empower Indian exporters by providing access to specialized inputs and creating a conducive trade and investment environment. This, in turn, is expected to boost exports of Indian-made goods and offer opportunities for the services sector to access more markets.
TEPA provides an opportunity for integration into EU markets and encourages domestic manufacturing in critical sectors such as infrastructure, manufacturing, machinery, pharmaceuticals, chemicals, food processing, transport and logistics, banking and financial services, and insurance.
The signing of TEPA marks a significant step towards realizing the goals of “Make in India” and Atmanirbhar Bharat, fostering domestic manufacturing, job creation, and technological collaboration over the next 15 years.
