India-EFTA New TEPA
| Aspect | Key Details |
|---|---|
| Signed | March 2024 (India + 4 EFTA nations) |
| EFTA Members | Switzerland, Norway, Iceland, Liechtenstein (Mnemonic: "SNIL") |
| Unprecedented Feature | 1st FTA with binding $100 bn FDI commitment to India + 1 million jobs (in 15 years) |
| India’s Concessions | Reduced/zero duties on Swiss watches, chocolates, diamonds, machinery |
| Exclusions | Dairy, soya, coal, sensitive farm products (protecting Indian farmers) |
| Trade Volume (2024) | $24.4 bn (India faces trade deficit, driven by gold imports from Switzerland) |
Critical Provisions of TEPA
- Market Access:
- EFTA: 100% non-agri + 82% agricultural products open for India.
- India: 95.3% tariff reduction on EFTA exports (phased over 10-15 years).
- Tariff Liberalization:
- EFTA: Eliminates duties on 99.6% of India’s exports (including engineering goods, pharma).
- Innovation & IPR:
- Patent flexibilities for Indian generics (balanced with Swiss pharma interests).
- Services:
- Easier mobility for Indian professionals (nurses, IT workers) via Mutual Recognition Agreements (MRAs).
Why EFTA Matters Geopolitically
- Non-EU Gateway: EFTA gives India access to European markets without EU alignment.
- Strategic Partners:
- Switzerland: Top source of FDI (Novartis, Nestlé, Roche).
- Norway: Renewable energy tech (hydro, wind) and $6 bn green investments planned.
- Countering China: Part of India’s strategy to diversify from China-focused supply chains.
India-EFTA Trade Dynamics
| Country | Trade Share | Key Imports by India | Opportunities |
|---|---|---|---|
| Switzerland | 92% | Gold (>70% deficit), machinery | Pharma, fintech, skill development |
| Norway | 6% | Seafood, minerals | Green energy, shipbuilding |
| Iceland | 1.2% | Fish, aluminum | Geothermal tech, tourism |
| Liechtenstein | 0.8% | Machinery, electronics | High-precision manufacturing |
Challenges & Controversies
- Trade Deficit: $14.8 bn deficit with Switzerland (2023) likely to widen with gold imports.
- IPR Pressures: Swiss demand for "TRIPS-plus" clauses could affect generic drug exports.
- Job Guarantee: No penalty clause if $100 bn/jobs target isn’t met.
Current Affairs Link (2024)
- India’s FTA Momentum: Parallel talks with UK, Oman, EU; aims to boost exports to $1 tn by 2030.
- Global Context: Part of "China+1" supply chain shift; Norway’s $100 mn investment in marine sector (Chennai).
- Domestic Push: Aligns with PM-MITRA parks for textiles and PLI schemes in manufacturing.
Previous UPSC Questions
- Prelims 2019:
"Which country is India’s largest trading partner in the European Free Trade Association?"
Answer: Switzerland. - Mains 2022 (GS3):
"Free Trade Agreements are instruments of economic growth and security. Discuss."