What is the proposed free trade agreement between India and EFTA?
The proposed agreement between India and the European Free Trade Association (EFTA) countries—Switzerland, Finland, Norway, and Liechtenstein—aims to enhance trade and investment flows. The pact includes commitments of $100 billion investments from EFTA into India over the next 15 years, expected to generate approximately one million jobs.
Why is this FTA significant for India?
This FTA is notable because it is the first time India has secured commitments on investment and employment from partner nations within a free trade agreement. It focuses on areas like pharmaceuticals, medical devices, certain chemicals, food processing, and engineering products.
What areas are EFTA countries interested in investing in?
EFTA countries are interested in forming joint ventures in sectors where India does not directly compete, such as pharmaceuticals (especially medical devices), specific chemicals, food processing, and engineering products.
How will the investments be made into India?
The investments from EFTA countries into India are likely to be sourced from their provident funds, targeting joint venture areas specifically chosen for their potential and lack of direct competition with Indian industries.
What does the trade pact include?
The proposed trade and investment agreement covers several chapters, including trade in goods, rules of origin, trade in services, investment promotion and cooperation, trade and sustainable development, and customs and trade facilitation.
How will this pact benefit India in terms of imports?
The agreement will diversify India’s import sources, particularly in medical devices, which are currently predominantly imported from China. This diversification is seen as crucial for India.
What are India’s trade figures with EFTA?
In 2023, India exported goods worth $1.87 billion to EFTA countries, including chemicals, pharmaceuticals, apparel, and pearls. Imports from EFTA amounted to $20.45 billion, with a significant portion consisting of pearls, precious metals, and coins.
Will the FTA affect India’s generic drugs industry?
India has assured that its interests in the generic drugs industry will not be compromised in the FTA with EFTA. The country has rejected demands for a ‘data exclusivity’ provision that could potentially harm its generic pharmaceutical sector.
When is the FTA expected to be formalized?
The FTA between India and EFTA is expected to be formalized soon, potentially before the next Indian elections, as all groundwork has been completed and the agreement is currently undergoing legal scrutiny.
