India-EFTA Trade: Cheaper Swiss Goods, Boost to Exports

New Delhi, Sep 30 (PTI) As the free trade agreement between India and four European nations EFTA will come into effect from Wednesday, several Swiss products like wines, chocolates, apparel, and watches will become cheaper in the domestic market.

On the other hand, Indian labour-intensive sectors, such as certain agri goods like tea and coffee, fruits, processed, textiles, marine products, leather, sports goods, toys, and gems and jewellery, will get greater market access in the member countries of the European Free Trade Association (EFTA), giving a boost to exports.

The EFTA members are Iceland, Liechtenstein, Norway, and Switzerland. The Trade and Economic Partnership Agreement (TEPA) was signed on March 10, 2024.

The other Indian export sectors, which will benefit from the lowering of duties under the pact, include engineering goods, electronic items, chemicals and plastic goods.

Under TEPA, the bloc has offered 92.2 per cent of tariff lines encompassing 99.6 per cent of India's exports.

India's offer to EFTA covers 82.7 per cent of tariff lines (or product categories), accounting for 95.3 per cent of EFTA exports.

Over 80 per cent of these imports are gold, with no change in effective duty on the precious metal. Sensitive sectors are protected, including pharma, medical devices, processed food, dairy, soya, coal, and sensitive agricultural products, the commerce ministry said.

According to an analysis by Global Trade Research Initiative (GTRI), India's tariffs on imports from the EFTA bloc will immediately come down to zero on coal except steam and coking coal, most medicines, dyes, most textiles and apparel, and iron and steel products.

Switzerland is a world leader in pharmaceuticals, spearheading new discoveries, and a top exporter of organic chemicals.

GTRI has stated that tariffs will be reduced to zero in five years by India on cod liver oil, fish body oil and smartphones.

In seven years, duties will be eliminated on tuna, trout, salmon, olive oil, cocoa bean, powder, malt products, corn flakes, instant tea, roasted chicory, most machinery, bicycle parts, clocks and watches.

Import duty will be reduced to zero by India in 10 years on olives, avocado, apricot, coffee, capsules, mate, hop cones, caramel, chocolate, products, and medical equipment (most).

The commerce ministry said India's exports to EFTA are concentrated, with Guar Gum accounting for over 70 per cent of the export basket in 2024-25.

Other exports include processed vegetables, basmati rice, pulses, fresh fruits, cereal preparations, and grapes.

"Norway and Switzerland together account for over 99 per cent of India's agri-exports to EFTA. This agreement is expected to reduce tariff barriers and expand India's share in key commodities," it noted.

It added that with a USD 100 billion investment commitment and preferential access to high-income European markets, TEPA offers a strategic springboard for India's electronics sector, especially MSMEs and OEMs seeking global scale.

There is an export potential for Indian medical electronics (diagnostic devices, wearables), smart sensors and embedded systems, secure communication modules (for fintech and banking) in the Swiss market.

In Norway, the ministry said there is a potential for EV components and battery management systems, marine electronics (navigation, sonar, smart grid and energy monitoring devices).