India has inked a significant Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA), comprising Iceland, Liechtenstein, Norway, and Switzerland. This landmark pact, in the works since 2008, signals India’s renewed commitment to global trade and economic cooperation.
The agreement promises expanded market access for Indian services firms, facilitated by relaxed visa rules, enabling them to leverage these countries as gateways to European markets. Professionals like architects, accountants, and nurses stand to benefit from increased opportunities. Moreover, Indian consumers can anticipate more affordable wines and chocolates, while producers gain access to cheaper machinery.
Central to the deal is the ambitious goal of attracting $100 billion in fresh foreign direct investment to India and generating one million jobs over the next 15 years. While India’s tariff reductions are contingent on investment inflows, the full impact will only be realized over time, necessitating sustained efforts from both sides to achieve these objectives.
The swift conclusion of the EFTA deal underscores India’s proactive approach to trade negotiations, marking its second major trade pact in recent years and its first with a Western nations’ grouping. This move represents a departure from previous hesitancy towards trade agreements since 2014, reflecting India’s readiness to embrace free trade amid growing global protectionism.
Of notable significance is India’s willingness to incorporate non-trade issues such as labor rights, human rights, environment, and gender equality into the agreement—a first in the country’s trade history. While the necessity of including these issues in trade deals may be subject to debate, it reflects a positive step towards alignment with international standards and potential collaboration with allies like the European Union (EU).
As the EFTA pact moves towards ratification by the end of 2024, it not only strengthens economic ties but also signifies India’s evolving stance on global trade, positioning the nation as a proactive player in the international economic arena.
