India-EFTA Trade Agreement Signed by PM Modi, Marked as Pioneering Free Trade Deal

India and the European Free Trade Association (EFTA) have officially inked a free trade agreement aimed at bolstering investments and enhancing exports in crucial domestic service sectors. The agreement, termed as the India-EFTA Trade and Economic Participation Agreement (TEPA), was lauded by Prime Minister Narendra Modi as one of the most groundbreaking free trade deals between nations, emphasizing shared prosperity and inclusive partnership.

PM Modi commended the negotiators and signatories involved, stating, "The culmination of efforts to finalize an innovative, well-balanced trade deal that reflects our respective developmental aspirations is commendable." He further added that the agreement symbolizes a commitment to open, fair, and equitable trade, aiming at fostering growth and employment opportunities for the youth.

The EFTA bloc, comprising Iceland, Liechtenstein, Norway, and Switzerland, has extended duty-free access to India's animal products, fish, processed food, and vegetable oils. Moreover, these nations have proposed a significant $100 billion investment in India over the next 15 years, with an expected creation of around one million jobs.

Negotiations for the trade treaty began in 2008, with Mint initially disclosing on Thursday that the Cabinet would consider approval for the FTA with the EFTA bloc, followed by the signing ceremony on Sunday. The agreement ensures immediate duty-free access, presenting favorable terms compared to other FTA partners. Additionally, EFTA intends to establish offices in India to facilitate its companies' operations.

However, trade experts remain cautious about the deal's potential benefits, especially concerning India's current export profile to Switzerland, where 98% of exports consist of industrial goods subject to zero tariffs. Ajay Srivastava, who heads the Global Trade Research Initiative (GTRI), commented, "India's agricultural exports are minimal and unlikely to increase significantly due to strict quality standards and non-tariff barriers."

Prime Minister Modi highlighted India's economic transformation over the past decade, aiming to propel the nation to the third-largest economy globally. He emphasized wide-ranging reforms enhancing the ease of doing business, which have propelled India to new heights in business, manufacturing, and exports.

Moreover, PM Modi pointed out the potential for collaboration in innovation and research between India and EFTA countries, spanning various sectors like digital trade, banking and financial services, transport and logistics, and clean energy.

The India-EFTA trade agreement signifies a significant milestone in India's pursuit of economic growth and integration into the global trade landscape. As the nation continues its reforms and partnerships, the deal is expected to open new avenues for trade and investment, contributing to India's development trajectory.