India-EFTA Trade Agreement

1. In March,2024 India and the EFTA (European Free Trade Association) signed a Free Trade Agreement called Trade and Economic Partnership Agreement (TEPA).
2. TEPA is the 4^th major deal signed by India to promote trade and economic cooperation in the last 3 years. The others are with Australia, Mauritius and the UAE.

About EFTA

1. The EFTA is the intergovernmental organisation of Iceland, Liechtenstein, Norway and Switzerland (all 4 are not a part of the European Union).
2. It was founded by the Stockholm Convention in 1960.
3. EFTA, though not part of the European Union (EU), is an organization that promotes free trade among its member countries.

Key Details of the Agreement

1. India is the EFTA’s 5th-largest trading partner after the European Union, the United States, Britain and China.

• Switzerland is India’s largest trading partner in this bloc of nations, followed by Norway.

2. India-EFTA trade was $18.65 billion in 2022-23, with a trade deficit of $14.8 billion
3. Investment Commitment: EFTA countries to invest $100 billion in India over 15 years
4. Scope: Covers trade in goods, rules of origin, intellectual property rights, services, investment promotion, government procurement, technical trade barriers, and trade facilitation.

India’s Relations with EFTA Nations

A. India and Norway

1. Both nations have been enjoying a cordial and friendly relationship since the establishment of relations in 1947.
2. Norway has supported India’s membership to export control regimes the Missile Technology Control Regime (MTCR), the Wassenaar Arrangement (WA) and the Australia Group (AG). 
3. In 2020, the India-Norway Task Force on Blue Economy for Sustainable Development was inaugurated jointly by both countries
4. HIMADRI, India’s 1^st research station is located at the International Arctic Research base, NyAlesund, Svalbard, Norway.

B. India and Switzerland

1. A Treaty of Friendship between both nations was signed on 14th August 1948.
2. India is Switzerland’s 4^th-largest trading partner in Asia and the largest in South Asia.
3. More than 300 Swiss companies such as Nestle, Holcim, Sulzer, and Novartis operate in India, while Indian IT majors TCS, Infosys and HCL working Switzerland.

C. India and Iceland

1. Both nations established diplomatic relations in 1972 and have strengthened their ties since 2005.
2. Iceland was the 1^st Nordic country to publicly extend support to India’s candidature for permanent membership in the United Nations Security Council (UNSC).
3. Both nations recently entered into a MoU to explore collaboration in renewable energy, green hydrogen, decarbonization initiatives, and geothermal energy.

D. India and Liechtenstein

1. Both nations established diplomatic relations in 1993.
2. As per RBI’s data, the FDI inflow from Liechtenstein amounts to USD 44.68 million from April 2000 to March 2020.

Major Trade Agreements of India

1. Free Trade Agreement (FTA) with Neighbouring Countries

FTA is a comprehensive deal between nations, offering preferential trade terms and tariff concessions, with a negative list excluding specific products and services.

1. India-Sri Lanka FTA
2. India- Nepal Treaty of Trade
3. India-Bhutan Agreement on Trade, Commerce and Transit

2. Regional FTA’s of India

1. India ASEAN Trade in Goods Agreement

10 ASEAN nations + India

2. South Asia Free Trade Agreement: India, Pakistan, Nepal,Sri Lanka, Bangladesh, Bhutan and Maldives.
3. Global System of Trade Preferences (41 nations + India).

3. India’s CEPAs and CECAs

CEPA and CECA is broader than FTAs, addressing regulatory, trade and economic aspects comprehensively, with CEPA having the widest scope including services, investment etc. while CECA mainly focus on tariff and TQR rates negotiation.

1. CEPA (Comprehensive Economic Partnership Agreement) with UAE, South Korea, Japan
2. CECA (Comprehensive Economic Cooperation Agreement) with Singapore, Malaysia

4. Preferential Trade Agreement (PTAs)

Partners in a PTA grant preferential access to specific products by lowering duties on agreed traffic lines, maintaining a positive list of products eligible for reduced or zero tariffs.

1. Asia Pacific Trade Agreement (APTA)
2. SAARC Preferential Trading Agreement (SAPTA)
3. India’s PTA with Chile, Afghanistan

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