Introduction
In a recent meeting in New Delhi, India and the four countries forming the European Free Trade Association (EFTA) are eager to recommence their discussions for a Trade and Economic Partnership Agreement (TEPA) that was postponed from 2018. The TEPA’s main objective is to bolster bilateral trade and economic cooperation between the two regions by reducing tariffs and non-tariff barriers, expanding market access, and promoting investment streams.
Understanding the European Free Trade Association (EFTA)
The EFTA is an intergovernmental organization established in 1960 as an alternative trade bloc for European nations that were unable or not willing to join the European Union (EU). The association consists of Iceland, Liechtenstein, Norway, and Switzerland. While these countries do not belong to the EU, they have access to its single market through different agreements.
India considers EFTA its 9th largest trading partner, contributing approximately 2.5% of India’s total merchandise trade in the past fiscal year (2020-21). India’s primary exports to EFTA include textiles, chemicals, gems, jewelry, machinery, and pharmaceuticals, while imports majorly comprise machinery, chemicals, precious metals, and medical instruments.
What is the Trade and Economic Partnership Agreement (TEPA)?
The TEPA aspires to create opportunities for trade and investment between India and EFTA by eliminating or lowering tariffs and non-tariff barriers on a broad range of products. One of its vital objectives is to ensure fair, transparent market access conditions for service providers and investors. This would further enhance cooperation on intellectual property rights protection and enforcement and bring about better trade procedures and customs cooperation with mechanisms to resolve disputes effectively.
The TEPA is a comprehensive agreement covering numerous areas such as trade in goods, trade in services, investment, intellectual property rights, competition, government procurement, trade facilitation, trade remedies, and dispute settlement.
Latest Highlights from the India-EFTA Relations
In recent events, adequate attention was given to the challenges presented by the global economic and trade environment. There was an agreement to address bilateral trade and economic partnership issues pragmatically. Furthermore, India proposed talks on gender equality and women’s empowerment to be included in the TEPA negotiations, reflecting India’s commitment to promoting social development along with economic growth.
Breaking Down India’s Relations with EFTA Countries
India maintains cordial relations with each of the four countries of the EFTA, each providing a unique contribution to India’s economic growth and foreign relations. Switzerland, being the 12th largest investor in India, has signed an inter-governmental framework agreement for technical and scientific cooperation with India. Norway, on the other hand, has established a Task Force on Blue Economy for Sustainable Development, has over 100 Norwegian companies in India, and is one of India’s most significant foreign investors.
Iceland and India share democratic values and mutual interests, with Iceland explicitly supporting India’s candidature for a UN permanent seat. On the other hand, Liechtenstein, despite modest bilateral trade, maintains cordial relations with India based on mutual respect and cooperation, even supporting India’s candidature for a permanent seat at the UNSC.
This ongoing relationship among these countries continues to foster improved communication and cooperation facilitating economic advancements, investment opportunities, skill enhancement, and cultural exchange which contributes significantly towards building a robust global economy.
Last Modified: February 20, 2024