What are the key components of the India-EFTA TEPA?
The India-EFTA Trade and Economic Partnership Agreement (TEPA) encompasses several key areas aimed at deepening economic engagement between India and the EFTA countries (Switzerland, Norway, Iceland, and Liechtenstein). The major components include:
• Investment: A target of $100 billion investment into India from EFTA countries, aiming to create one million jobs over a 15-year period, with provisions for India to withdraw tariff concessions if these investments do not materialize.
• Trade in Goods: Significant tariff concessions from India, benefiting EFTA exports in seafood, fruits, coffee capsules, various oils, sweets, processed foods, electronics, medical equipment, and more. Specific reductions in tariffs on diamonds and wines have also been outlined.
• Trade in Services: Liberalisation across a wide range of sectors, including specific commitments for Indian professionals and service providers in EFTA countries.
• Sustainable Development: A chapter on Trade and Sustainable Development (TSD), committing to environmental and labour standards.
• Intellectual Property Rights (IPR): Commitments that exceed the WTO’s TRIPS Agreement, aiming to protect the interests of pharmaceutical and high technology companies in EFTA countries.
Why is an FTA with India attractive for European trading partners?
An FTA with India is highly attractive for European trading partners for several reasons:
• Market Access: It allows these countries to surpass India’s high tariff walls and access a large and growing market, which is particularly valuable in a time of rising protectionism.
• Diverse Economic Engagement: The TEPA not only focuses on trade in goods but also includes significant opportunities in investment, services, and sustainable development, offering a holistic economic partnership.
• Strategic Interests: Strengthening economic ties with India supports the strategic interests of European countries in Asia, amid shifting global trade dynamics.
What challenges are associated with the India-EFTA TEPA?
Despite the potential benefits, the TEPA faces several challenges:
• Implementation and Compliance: The actual benefits from the TEPA depend on its implementation, requiring both sides to meet the ambitious targets and commitments. This includes navigating complex regulatory environments and ensuring compliance with the agreement’s provisions.
• Protectionism: Rising protectionism across the globe poses a challenge to the free trade ethos of the TEPA. Both sides will need to counter domestic protectionist pressures to ensure the agreement’s success.
• Sustainable Development Scrutiny: The TSD chapter introduces commitments to environmental and labour standards, which could become a source of tension if seen as proxies for protectionist measures.
• Intellectual Property Rights: The IPR provisions may necessitate changes to India’s existing laws and regulations, potentially sparking domestic debate over compliance with TEPA mandates versus national legal frameworks.
Overall, while the India-EFTA TEPA opens up significant opportunities for deepened economic ties between India and the EFTA countries, its success will hinge on effective implementation, navigating the challenges of protectionism, and managing the complexities of regulatory compliance and domestic legal adaptations.
SRIRAM’s
