After a lengthy process spanning sixteen years and 21 rounds of negotiations, India finalised the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) countries – Iceland, Switzerland, Norway, and Liechtenstein on March 10. The agreement includes commitments from EFTA to bolster foreign direct investments worth $100 billion over the next 15 years and to potentially create 1 million jobs during that period.
Provisions of the TEPA entail significant tariff reductions, with EFTA offering 92.2% of its tariff lines and India reciprocating by offering 82.7% of its tariff lines. The agreement is anticipated to lead to substantial reductions in customs duties, particularly impacting goods such as wines, clocks, watches, olives, avocados, and more, over varying timelines.
Experts highlight the significance of this FTA as it marks India’s first major trade deal with a key European economic bloc, paving the way for potential agreements with the European Union and the UK shortly. Agneshwar Sen from EY India emphasised that the pact signifies a shift towards broader considerations like sustainability, labour, and gender, distinguishing it from previous agreements. It is anticipated that similar agreements with Oman and the UK may follow suit in the future.
