Swiss watches, chocolates set to get cheaper for Indians

India, on March 10, signed a trade and investment agreement with the European Free Trade Association (EFTA), comprising Iceland, Liechtenstein, Norway, and Switzerland.

Indians are set to start paying less for world-famous Swiss watches and chocolates thanks to the duty concession offered by New Delhi as part of the Trade and Economic Partnership Agreement (TEPA) struck with the four-nation European Free Trade Association (EFTA) on March 10.

As part of the deal, India will reduce basic customs duties on chocolates and on wrist as well as pocket watches originating from Switzerland. The levy will be brought down to zero in equal instalments over a seven-year period, the fine print of the pact shows. At present, India levies an import duty of 30 percent on chocolates and chocolate products and 20 percent on most variants of watches that come in from Switzerland.

The agreement with EFTA – which comprises Iceland, Liechtenstein, Norway, and Switzerland – will come into force after the ratification process is completed by all the parties involved.

Total trade between India and the four EFTA nations stood at $18.66 billion in 2022-23, with the largest share belonging to Switzerland, followed by Norway. India's key exports to EFTA countries include organic and inorganic chemicals, drugs and pharmaceuticals, gems and jewellery. Major imports from these states are gold, pharmaceuticals, watches, and ships and boats.

According to estimates from Global Trade Research Initiative, Switzerland accounts for 91 percent of bilateral merchandise trade, making it India’s largest EFTA trading partner.

As part of the TEPA, India will also eliminate duties on most machinery items and medical devices flowing in from Switzerland at one go whenever the agreement comes into force.

India has also offered concessions on Swiss wines for those that have a CIF (shipping price that covers costs, insurance, and freight) between $5 and $15. Those with a CIF of more than $15 will see a reduction in their duties in equal installments over a 10-year period.

Through the TEPA, while the EFTA is offering 92.2 percent of its tariff lines – which cover 99.6 percent of India’s exports – India is offering 82.7 percent of its tariff lines covering 95.3 percent of EFTA exports. Of this, more than 80 percent is gold.

"The effective duty on gold remains untouched. Sensitivity related to Production Linked Incentive (PLI) in sectors such as pharma, medical devices, and processed food, etc have been taken while extending offers. Sectors such as dairy, soya, coal and sensitive agricultural products are kept in exclusion list," the Indian government said in a statement on March 10.

The EFTA’s market-access offer covers all non-agricultural products and tariff concession on Processed Agricultural Products. India has offered 105 sub-sectors to the EFTA and secured commitments in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland, as per the statement.