NEWS – India signed a free trade agreement (FTA) termed – Trade and Economic Partnership Agreement (TEPA)  – with four European countries — Iceland, Liechtenstein, Norway, and Switzerland

FREE TRADE AGREEMENT (FTA)

• Pact between two or more countries to facilitate trade and eliminate barriers such as tariffs and quotas
• The primary goal of FTAs is to promote economic integration by fostering the free flow of goods and services between participating nations

NOTE : Iceland, Liechtenstein, Norway, and Switzerland are nations part of European Free Trade Association (EFTA) set up in 1960 for the promotion of free trade and economic integration

HIGHLIGHTS OF TEPA

• Eliminate most of the import duties on a reciprocal basis
• Focus areas :  market access related to goods, rules of origin, trade facilitation, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, investment promotion, market access on services, intellectual property rights, trade and sustainable development.
• EFTA Will offer
  • Tariff cuts on 92.2 per cent of its imports covering 99.6 per cent of India’s exports to the region
  • Market access offer covers all of India’s non-agricultural products
  • Tariff concession on processed agricultural products
• India will
  • Cut tariffs on 82.7 per cent of its imports from the EFTA, covering 95.3 per cent of the region’s exports to this country
  • Gold accounting for more than 80 per cent of India’s imports
• Services sector commitments – boost to India’s service sector exports, especially in IT, business services, personal, cultural, sporting and recreational services, other education services, audio-visual services etc.
• EFTA is offering better access through digital delivery of services, commercial presence and certainty for entry and temporary stay of key personnel.
• Mutual recognition of professional services like nursing, chartered accountants, architects etc
• India will open up a number of sectors, including pharmaceuticals, machinery and manufacturing, for investment
• India has opened up 105 sub-sectors to the EFTA, against commitments in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland
• Among EFTA member countries, Switzerland is India’s largest trading partner, followed by Norway
• The TEPA will also provide a window for Indian exporters to access large European and global markets
• The investments, in turn, will give a boost to the government’s `Make in India’ drive and create jobs for the young and talented workforce, the minister added.
• Benefit : Expected to result in $100 billion in investments and a million direct jobs over the next 15 years