India entered into a free trade agreement with the European bloc, EFTA, on Sunday and received an investment commitment of $100 billion in the next 15 years, as part of the trade pact.
The EFTA is made up of four nations, namely, Norway, Switzerland, Iceland, and Liechtenstein.
Hailing the trade pact as a watershed moment, Piyush Goyal, Commerce and Industry Minister, said that this marked India’s first modern trade pact with a group including developed nations. “For the first time in a trade agreement, EFTA had committed to invest $100 billion in the next 15 years. It would take around a year for the agreement to come into force,” he added, reported PTI.
The trade agreement, titled Trade And Economic Partnership Agreement (TEPA), includes 14 chapters, ranging from trade in goods, rules of origin, government procurement, technical barriers to trade, and trade facilitation, among others.
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The agreement would provide greater market access for the EFTA countries. Speaking on behalf of the EFTA member states, Guy Parmelin, Federal Councillor, said, “Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs…All in all, the TEPA will allow us to make better use of our economic potential and create additional opportunities for both India and the EFTA States.”
Typically a free trade agreement helps both the trading parties to majorly slash or eliminate customs duties on the majority of the goods traded between both sides. It also relaxes norms to help provide a boost to trade in services and investments.
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Notably, the negotiations for TEPA have been going on since January 2008. Nearly 13 rounds of negotiations took place till November 2013, after which things were put on hold.
