India-EFTA trade agreement with effect from October 1

After a long wait of nearly a year and a half, the trade agreement between India and the four-member European Free Trade Association (EFTA) will come into effect from October 1.
India-EFTA trade agreement, $50 billion in investment expectedThe TEPA agreement between India and EFT countries, which will come into effect from October 1, is set to open up new opportunities for investment, exports, and employment.

A major event will be held at the Bharat Mandapam in New Delhi to mark its launch. Commerce and Industry Minister Piyush Goyal, ministers from EFT countries, key government officials, and several industry participants and government officials will be present. A government official told Business Standard, "The idea is to ensure that industry stakeholders are aware of the agreement and are better positioned to take full advantage of it."

The EFTA bloc includes Iceland, Switzerland, Norway, and Liechtenstein. This trade agreement is called the Trade and Economic Partnership Agreement (TEPA). This is a significant step towards India's economic integration with a major European economic bloc. This is India's first trade agreement to be implemented with any European country or bloc. Under this agreement, India has promised to reduce tariffs on 80-85 percent of goods from AFTA countries.

In return, India will receive duty-free market access on 99 percent of goods. Both sides have excluded most agricultural and dairy products from tariff concessions to protect farmers. According to India, the biggest benefit of the trade agreement is the investment commitments received from AFTA countries. AFTA countries are expected to invest $50 billion in India within 10 years of the agreement's entry into force, and an additional $50 billion in the next five years. This is expected to create 1 million direct jobs in India over 15 years.

Import tariffs in AFTA countries are low. Therefore, the benefits of market access for India may be limited. However, India has entered into the first agreement in which market access is linked to investment. In this respect, this agreement is unique.