Factbox: Key details of India's pact with four-nation European trade bloc
10/03/2024 08:35
By Manoj Kumar
NEW DELHI, March 10 (Reuters) - India signed a free
trade pact on Sunday with a group of European nations -
Switzerland, Norway, Iceland and Liechtenstein - committing to
reduce tariffs, while New Delhi receives $100 billion in
investments over the next 15 years.
India and the members of the European Free Trade Association
(EFTA) held 21 rounds of talks over 16 years to clinch the
broad-based Trade and Investment Agreement.
Here are key facts about the trade pact:
BOOST TO TRADE, INVESTMENT:
India expects that the pact, following deals with the UAE
and Australia, will boost exports of pharmaceuticals, garments,
chemicals and machinery while attracting investments in
automobiles, food processing, railways and the financial sector.
India is the EFTA's fifth-largest trading partner after the
European Union, the United States, Britain and China, with total
two-way trade touching $25 billion in 2023, its trade ministry
estimates.
Its exports to the EFTA touched $2.8 billion and imports
were about $22 billion during that period.
With a population of 13 million and combined GDP of more
than $1 trillion, the EFTA nations are the world's ninth largest
merchandise trader and its fifth largest in commercial services.
SWISS COMPANIES TO BENEFIT:
Swiss manufacturers of machinery, luxury items such as
watches and transport are expected to benefit, the Swiss
government says. India has invited Swiss transport companies to
invest in the railways.
The pact allows EFTA nations the opportunity to export
processed food and beverages, electrical machinery, and other
engineering products to a potential market of 1.4 billion people
at lower tariffs.
The pharmaceutical and medical devices industry within the
bloc could also benefit.
INDIA-SWISS RELATIONS:
India hopes the pact will improve trade ties with
Switzerland - the biggest partner in the EFTA. India is its
fourth-largest trading partner in Asia and the largest in South
Asia.
More than 300 Swiss companies such as Nestle, Holcim,
Sulzer, and Novartis, apart from banks such as UBS operate in
India, while Indian IT majors TCS, Infosys and HCL work in
Switzerland.
TOUGH NEGOTIATIONS:
Prime Minister Narendra Modi's government has often
criticised predecessor governments for compromising the
interests of domestic industry in trade pacts and moved slowly
in seeking a firm commitment to increase investments.
Talks on trade pacts have run for years with Britain, the
European Union and other partners.
NO TO DATA EXCLUSIVITY:
India earlier rejected the four nations' demand for the pact
to include provisions on "data exclusivity" that would make it
difficult for its drug companies to produce generic variants of
the off-patent drugs, Indian officials said.
India and the EFTA also agreed to largely keep "sensitive"
farm products and gold imports out of the pact.
LIMITATIONS OF THE PACT:
Switzerland's policy of tariff-free entry for all industrial
goods from any country, with effect from Jan. 1, would affect
benefits to Indian companies, Global Trade Research Initiative,
a think tank based in New Delhi, says in a report.
India is likely to keep facing difficulties in exporting
farm produce to Switzerland due to a complex web of tariffs,
quality standards, and approval requirements, analysts warned.
(Reporting by Manoj Kumar; Editing by Clarence Fernandez)
((manoj.kumar@thomsonreuters.com; +919810286200;
Twitter:@manojgulnar;))