The Trade and Economic Partnership Agreement (TEPA) between India and the European EFTA countries (Switzerland, Norway, Iceland, Liechtenstein) will come into effect on October 1. Under this agreement, 99% of Indian exports will be tax-free, while India will remove taxes on 80–85% of imports. EFTA countries will invest $100 billion over 15 years, which is expected to create 10 million jobs in India.
India's first Europe-facing trade: The first trade agreement, TEPA, between India and the European group of four wealthy nations, EFTA (Switzerland, Norway, Iceland, Liechtenstein), will be implemented on October 1 at Bharat Mandapam in Delhi. Union Minister Piyush Goyal and leaders from EFTA countries will be present on the occasion. This agreement will benefit India with tax-free access for 99% of its exports, an investment of $100 billion, and 10 million new jobs. Meanwhile, agricultural and dairy products have been kept out of the deal to avoid impacting domestic farmers.
What is EFTA and which countries are included in it?
EFTA, or the European Free Trade Association, was established to promote trade in Europe. It includes four small but very prosperous countries: Switzerland, Norway, Iceland, and Liechtenstein. The trade agreement between India and EFTA countries, known as TEPA, was signed in March this year. Following approval from all countries, this agreement is set to come into effect on October 1.
Trade without taxes
After this agreement comes into effect, there will be a significant change in trade between India and EFTA countries. Both sides will now be able to trade with each other with low or no taxes. This means that many goods coming from these countries will be cheaper in India, and Indian products will also be sold there without taxes. The government believes this will empower Indian exporters in the European market.
Major investment clause in the agreement
This agreement is not limited to trade alone; it also includes investment. EFTA countries have pledged to invest $100 billion in India over the next 15 years. This includes $50 billion in the first 10 years, followed by another $50 billion in the next 5 years. The government estimates that this investment will create approximately 10 million new job opportunities in the country. This is the first time India has directly included an investment clause in a trade agreement.
India to gain significant benefits
In EFTA countries, import taxes are generally not high, making it relatively easy for Indian producers to sell goods there. However, India will now gain tax-free access for approximately 99 percent of its goods. On the other hand, India has also removed taxes on about 80 to 85 percent of products coming from these countries. Nevertheless, agricultural and dairy products have been excluded from this agreement to avoid impacting the country's agriculture and dairy industry.
Switzerland: The largest partner
Switzerland is India's largest trading partner among the EFTA countries. Last year, India exported approximately $2 billion to EFTA countries, with about three-quarters of that going to Switzerland. Meanwhile, India imported $22 billion from these countries, with $21.8 billion coming solely from Switzerland. These figures indicate that India is facing a significant trade deficit with these countries. However, the government believes that this agreement will balance trade and that investments will lead to the establishment of new industries.
Special event at Bharat Mandapam
On October 1, the day the agreement comes into effect, a grand event will be held at Bharat Mandapam in Delhi. Industry leaders, business organizations, and government officials will participate. Through this event, the government aims to convey the message that India has opened a new avenue for trade with Europe and that businesses should fully leverage this opportunity.
