Marking a significant milestone for Rising India, the nation has finalized a comprehensive Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA), comprising Switzerland, Iceland, Norway, and Liechtenstein, on March 10, 2024. This marks India's first free trade agreement (FTA) with four developed European nations, promising significant economic benefits.

Key points of the agreement include:

1.     Investment Commitments: EFTA pledges to increase foreign direct investments by $100 billion in India over the next 15 years, aiming to generate one million direct jobs. This commitment is unprecedented in FTA history.

2.     Market Access: EFTA offers access to 92.2% of its tariff lines, covering 99.6% of India's exports. India reciprocates by providing access to 82.7% of its tariff lines, including concessions on processed agricultural products.

3.     Sectoral Exclusions: Sensitive sectors like pharmaceuticals, medical devices, and processed foods are safeguarded, while dairy, soya, coal, and certain agricultural products remain excluded.

4.     Services Trade: TEPA facilitates services exports, particularly in IT services, business services, education, and audio-visual services. It also ensures better access through digital delivery and commercial presence.

5.     Intellectual Property Rights (IPR): Commitments on IPR are at the level of TRIPS, with a focus on generic medicines and concerns regarding patent evergreening. The chapter with Switzerland highlights India's robust IPR regime.

6.     Sustainable Development: TEPA emphasizes sustainable development, social inclusivity, and environmental protection, fostering transparency and efficiency in trade procedures.

7.     Market Integration: The agreement provides opportunities for Indian exporters to access specialized inputs and integrate into EU markets, leveraging Switzerland as a gateway.

8.     Boosting Domestic Manufacturing: TEPA supports initiatives like "Make in India" and "Atmanirbhar Bharat," encouraging domestic manufacturing across various sectors including infrastructure, pharmaceuticals, and banking.

9.     Job Creation and Technology Collaboration: The agreement aims to create a significant number of direct jobs for India's youth and facilitates technology collaboration in precision engineering, health sciences, and renewable energy.

Overall, TEPA is expected to enhance India's trade relations with EFTA countries, stimulate economic growth, and create opportunities for both goods and services sectors, aligning with India's broader economic objectives.

SilkRoute, is a market entry consultancy company which provides market entry and route-to-market (RTM) solutions to companies seeking to do business in Asia Pacific. Should you need any help please write to info@dcclconsulting.com