India and the 4-nation European Free Trade Association (EFTA) that groups Iceland, Norway, Lichtenstein and Switzerland, are expected to sign an agreement very soon that could see $100 billion invested in India over 15 years, say reports in the pink papers. The deal could also open up the export of pharmaceutical goods to these countries, processed foods and vegetable oils.
At this moment only hazy contours of the deal are in the public domain. But it’s interesting to note it has been in negotiation for around 15 years and is officially known as the Trade & Economic Partnership Agreement, according to a report in the Business Standard. It covers several areas including trade in goods, rules of origin, IPR, trade in services and so on. India has offered immediate duty elimination on 40% of trade lines where currently trading is low or nil.
India has a negative balance of trade with these countries, exporting less than $2 billion worth of goods last year and importing around $20 billion. India evidently hopes that a deal of this kind could boost exports and bring more equity in the trade balance. Whether this actually happens will be closely monitored by India’s Commerce Ministry.
It’s also important to note that none of these countries are members of the European Union, and the EFTA they are members of is an intergovernmental body for the promotion and deepening of free trade. The Business Standard report said “It was founded as an alternative for states that did not want to join the European Union.”
Incidentally, India is negotiating a free trade agreement with the EU which has been going on since July 2022. Negotiations had taken place earlier too, in 2007 and suspended in 2013 “due to a gap in ambition,” according to a report in the website of the European Union.
