During his visit to Zurich, Indian Commerce and Industry Minister Piyush Goyal’s meeting with Swiss investors marks a pivotal moment in Indo-Swiss economic relations. Goyal’s efforts to attract Swiss investments are aligned with India’s broader strategy to bolster its economic landscape through foreign direct investments (FDI) and strategic partnerships.
Highlights of the India-EFTA Trade Agreement
Boosting Economic Ties
The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) — comprising Switzerland, Iceland, Norway, and Liechtenstein — represents a landmark in India’s international trade policy. Signed on March 10, 2024, this agreement is designed to enhance economic cooperation and open new avenues for trade and investment between India and these European nations.
Investment and Employment Commitments
One of the most significant aspects of the TEPA is the commitment to attract $100 billion in investments over the next 15 years and create 1 million direct jobs in India. This unprecedented legal commitment reflects a strategic move to integrate India’s economy more deeply with European markets and leverage Swiss expertise in sectors such as pharmaceuticals, machinery, and precision engineering.
Sectoral Impacts and Opportunities
Services and Intellectual Property
The TEPA includes robust provisions for services trade, particularly benefiting India’s IT and business services sectors. Enhanced digital delivery of services and improved market access will facilitate greater economic integration. Furthermore, the agreement addresses intellectual property rights (IPR) at a TRIPS level, accommodating India’s interests in generic medicines while ensuring high standards for IPR protection.
Manufacturing and Export Growth
By fostering investment in domestic manufacturing under initiatives like “Make in India” and “Atmanirbhar Bharat,” the TEPA aims to boost exports of Indian-made goods. Swiss investors are expected to play a crucial role in sectors like pharmaceuticals, chemicals, and food processing, driving growth and innovation in India’s manufacturing landscape.
Enhancing Bilateral Trade
Current Trade Dynamics
India’s trade with EFTA nations, particularly Switzerland, has seen a steady increase. In the last fiscal year, bilateral trade between India and Switzerland reached $17.14 billion, with significant exports from India including gems, jewellery, machinery, and textiles. Imports from Switzerland primarily consist of gold, machinery, and pharmaceuticals.
Future Prospects
The TEPA is set to further enhance market access for Indian products and streamline customs procedures, making it easier for businesses to operate across borders. With improved trade facilitation, Indian companies can leverage Switzerland as a gateway to the broader European market, capitalizing on the country’s strategic location and economic prowess.
Strategic Importance of the TEPA
The signing of the TEPA is more than just a trade agreement; it symbolizes a commitment to shared prosperity and mutual growth. By creating a conducive environment for trade and investment, the TEPA is poised to strengthen economic ties, foster innovation, and drive sustainable development across all participating nations.
Meet Suhas Harshe, a financial advisor committed to assisting people and businesses in confidently understanding and managing the complexities of the financial world. Suhas has shared his knowledge on various topics like business, investment strategies, optimizing taxes, and promoting financial well-being through articles in InvestmentDose.com
