INDIA
AND FTAS - ECONOMY
News: Watch | Trade diplomacy | What’s the status of India’s Free Trade Agreements?
What's
in the news?
●
India signed a free trade agreement (FTA)
with four European countries — Iceland,
Liechtenstein, Norway, and Switzerland, recently, with a goal of reaching
$100 billion in investments in India and one million jobs within 15 years.
Key
takeaways:
●
The Trade
and Economic Partnership Agreement (TEPA) marks the second such
full-fledged FTA signed after India’s agreement with the United Arab Emirates.
●
These FTAs are expected to see
considerable tariff reduction, increase in market access, and simplification of
customs procedures.
Trade
and Economic Partnership Agreement (TEPA):
●
It was signed on March 10, 2024 between
India and EFTA member states such as Iceland, Liechtenstein, Norway and
Switzerland.
Goal:
●
Promote investments and exports,
particularly in India’s IT, audio-visual sectors and skilled professional
movement.
Investment
Target:
●
The EFTA states shall aim to increase FDI into India by $50 billion
within 10 years, and another $50 billion in the five years thereafter.
Key
Features:
●
For the first time, the FTA also included
a chapter on commitments to human rights and sustainable development.
●
The agreement will come into force after
ratification by the EFTA states, expected possibly by the end of the year.
Benefits
for India:
●
Tariff
reduction: After the treaty comes into effect, the EFTA nations
will see a reduction in tariffs on most industrial goods exported to India,
such as pharmaceutical products, machinery, watches, fertilisers, medicine,
chemical products and others.
●
Increased
trade and investment: EFTA investment already stood at $10.7
billion in 2022 and Switzerland is India’s largest trading partner in this bloc
of nations, followed by Norway.
●
Job
creation: As per the newly signed agreement, the EFTA states
shall aim to increase FDI into India by $100 billion within 15 years. This
could facilitate the generation of one million direct jobs in the country.
●
Access
to the EFTA markets: Markets of these four countries will be
opened for Indian products, thereby enhancing the export avenues for Indian
products.
●
Services
sector: The services sector also forms a vital part of this
trade agreement. The agreement would help stimulate services exports in areas
such as information technology and facilitate the movement of key skilled
personnel.
Go
back to basics:
India
and FTAs:
●
India-ASEAN FTA
●
India-Singapore CECA
●
India-Malaysia CECA
●
India-Thailand FTA - Early Harvest Scheme
(EHS)
●
India-Japan CEPA
●
India-South Korea CEPA
●
Agreement on SAFTA
●
India-Sri Lanka FTA
●
India-Nepal Treaty of Trade
●
India-Bhutan Agreement on Trade, Commerce
and Transit
●
India-Mauritius Comprehensive Economic
Cooperation and Partnership Agreement (CECPA)
●
India-UAE CEPA
●
India-Australia Economic Cooperation and
Trade Agreement (Ind-Aus ECTA)