India, EFTA trade deal likely to be operational by September

Commerce Minister Piyush Goyal

The Trade and Economic Partnership Agreement (TEPA) between India and European Free Trade Association (EFTA), which includes Iceland, Liechtenstein, Norway, and Switzerland, is likely to be operationalised by September.

"All the four countries' parliaments (Iceland, Liechtenstein, Norway, and Switzerland) have ratified the EFTA deal. There is a mandatory waiting period in Switzerland, which should end by Fall that is when it should be operationalised, around September, a government official said.

While the trade and investment deal between India and EFTA nations was inked on March 10, 2024, it is yet to be implemented given lengthy ratification processes.

For instance, for a trade agreement to kick in, Switzerland typically takes the referendum route before green lighting any agreement from their end. A referendum is a vote in which the people of a nation are asked to either accept or reject a particular proposal.

Apart from that, Liechtenstein and Norway's Parliaments too had to ratify the trade deal before it can be operationalised, a process which has now concluded.

As part of the trade and investment deal, EFTA countries will aim to increase foreign direct investment from investors of these nations into India by $50 billion within 10 years from the time the agreement comes into force, and an additional $50 billion in the next five years.

The bloc will also look to facilitate generation of one million jobs within 15 years in India from the time the agreement is operationalise as a consequence of the commitment on foreign direct investment inflows.

However, the investment promised by EFTA nations will hinge on India maintaining a nominal GDP growth rate of around 9.5 percent in US dollar terms in the next 15 years, which is in line with the South Asian nation's past growth rates, as well as on the anticipated benefits of a full implementation of the agreement.