India-EFTA TEPA: A New Era in Global Trade Relations

India-EFTA TEPA: A Landmark in Global Trade

India has taken a momentous stride in its global trade relations with the signing of a groundbreaking Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) on March 10, 2024. This landmark agreement signifies a significant milestone as India embarks on a comprehensive free trade pact with four developed European nations: Switzerland, Iceland, Norway, and Liechtenstein.

Forward-Looking Accord

Shri Piyush Goyal, Minister of Commerce and Industry, Food and Consumer Affairs, and Textiles, emphasized the forward-looking nature of the TEPA. This modern and ambitious agreement sets a precedent by incorporating binding commitments, including a pledge of $100 billion in investment and the creation of 1 million direct jobs over the next 15 years. Such commitments are unprecedented in the history of FTAs and demonstrate a significant leap in India’s economic engagement with developed nations.

Key Components of the Agreement

The TEPA comprises 14 chapters focusing on various aspects of trade and economic cooperation. These include provisions related to market access for goods, rules of origin, trade facilitation, investment promotion, services, intellectual property rights, and sustainable development. Notably, the agreement encompasses commitments to enhance market access for both goods and services, facilitating trade between India and EFTA member states.

Investment and Employment Commitments

EFTA has committed to promoting investments in India with the aim of increasing foreign direct investment by $100 billion and generating 1 million direct employment opportunities within the country. This historic commitment underscores the potential for substantial economic collaboration between India and EFTA member states.

Market Access and Tariff Concessions

EFTA’s market access offer covers a significant portion of India’s exports, with tariff concessions extended to various non-agricultural products and processed agricultural products. Similarly, India has offered tariff concessions covering a substantial portion of EFTA exports, with certain sensitive sectors excluded from the agreement to safeguard domestic interests.

Services Sector Opportunities

The TEPA presents opportunities for the services sector, particularly in areas such as IT services, business services, education services, and audio-visual services. Enhanced access to EFTA markets through digital delivery of services and improved commitments for entry and temporary stay of key personnel will further facilitate trade in services between India and EFTA member states.

Intellectual Property Rights and Sustainable Development

The agreement includes commitments related to intellectual property rights at TRIPS level, ensuring robust protection for India’s interests in generic medicines and addressing concerns related to patent evergreening. Additionally, the TEPA signals India’s commitment to sustainable development, inclusive growth, and environmental protection, aligning with international standards.

Promoting Make in India and Atmanirbhar Bharat

TEPA is expected to boost India’s manufacturing sector by encouraging domestic production across various industries, including infrastructure, manufacturing, pharmaceuticals, chemicals, and food processing. By fostering an enabling environment for trade and investment, the agreement aligns with India’s vision of self-reliance and economic growth.

Empowering India’s Workforce

The agreement is poised to create a significant number of direct jobs for India’s young workforce over the next 15 years. Moreover, it emphasizes the importance of vocational and technical training, technology collaboration, and access to cutting-edge technologies, enhancing India’s competitiveness in the global market.

Conclusion

The signing of the TEPA between India and EFTA member states represents a landmark achievement in India’s trade diplomacy. By fostering deeper economic integration and cooperation, the agreement opens up new avenues for growth, investment, and job creation, positioning India as a key player in the global economy.