In a significant boost to economic ties, India signed a free trade agreement with the European Free Trade Association (EFTA) on March 10th, 2024. EFTA comprises Iceland, Liechtenstein, Norway, and Switzerland – all known for their high-income economies. This deal is expected to usher in a new era of cooperation, with a projected $100 billion in investments over 15 years.
The pact focuses heavily on promoting trade in key sectors like Information Technology (IT), audio-visual services, and skilled professional movement. This is seen as a win for India’s growing IT industry and its large pool of skilled professionals. Additionally, India has secured a commitment of potential investments of $50 billion in the first decade, followed by another $50 billion in the next five years, aiming to create new job opportunities in India.
While the deal promises substantial benefits, some concerns remain. Switzerland, a major EFTA member, recently eliminated import duties on all industrial goods. This might lead to stiffer competition for Indian goods in the Swiss market despite any tariff reductions achieved in the deal. Nevertheless, the India-EFTA agreement is a positive step towards strengthened economic ties and holds the potential to unlock significant growth opportunities for both sides.
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