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Key Takeaways of the India-EFTA Inked on Sunday – Defence News

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In return for an investment of US$100 billion over the next 15 years, India has agreed to lift most import tariffs on industrial products from four European countries. The four-nation bloc has inked the historic Trade and Economic Partnership Agreement (TEPA) after completion of year long negotiations which were fast tracked.

The deal inked on Sunday with four European nation bloc European Free Trade Association (EFTA): Norway, Iceland, Switzerland, and Liechtenstein is expected to invest US$ 100 billion over a period of 15 years, in the Indian market.

What will India give in return?

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Under the agreement signed, India will lift or partially remove very high customs duties on almost 95.3 percent of industrial imports from Switzerland. However, this excludes gold.

In a separate statement, Industry Minister Jan Christian Vestre said: “Norwegian companies exporting to India today meet high import taxes of up to 40 percent on certain goods. Adding, “With the new deal, we have secured nil import taxes on nearly every Norwegian good.”

According to the Prime Minister of Norway Jonas Gahr Store: “this is an important agreement for the business sector. India is the world’s largest economy and represents a huge market that will provide big export opportunities for Norwegian businesses.”

At a press interaction the Norwegian Minister for Trade and Industry Jan Christian Vestre after the signing of the India-EFTA Agreement said that during the last year they worked intensely and, in a result -oriented manner in an effort to achieve this. Norwegian businesses that export to India meet high tariff barriers of up to 40 percent on certain goods, with this agreement in place, Norway has secured zero tariff on almost all Norwegian exports.

How is this important for Norway? 

According to the minister, this breakthrough can mean a lot for workplaces throughout Norway. This agreement is a part of the government’s export initiative “Hele Norge eksporterer’’. For the first time the Norwegian enterprises have got exemption from customs duties on most of the goods exported to India. The European Union and the UK do not have this advantage yet.

India-EFTA

According to Minister of Commerce Piyush Goyal, the agreement signed has some new elements including Intellectual rights, and gender equity. “It is a modern trade agreement, fair, equitable and win-win for all five countries.”

India has committed to cut its ‘bound tariff rate’ on gold to 39 percent from 40 percent. However, it does not anticipate much impact on imports of the metal from Switzerland, which were estimated at US$16 billion last fiscal year.

According to Swiss official Guy Parmelin, the pact is a result of 21 rounds of negotiations and is important as the Indian market offers immense opportunities for trade and investment.

Information available in the public domain indicates that with total two-way trade of US$25 billion in 2023, India is the EFTA grouping’s fifth-largest trading partner after the European Union, the United States, Britain and China.

According to Swiss officials, the pact includes a comprehensive and legally binding chapter on trade and sustainable development.

Why is this significant? 

This chapter is expected to enable the EFTA member countries in particular to address trade related sustainability considerations.

When will the pact become operational?

The five signatories must ratify the deal before it becomes operational. Switzerland is planning to ratify by next year.

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