India-EFTA trade deal: Things that will get cheaper

On 10 March, India signed an important trade agreement with the European Free Trade Association (EFTA), an organisation which represents 4 European countries - Switzerland, Norway, Iceland and Liechtenstein that will promote duty-free import and export between India and those countries along with investments and jobs. This trade agreement has taken place after a wait of nearly 16 years. The negotiations of this deal were started in the year 2008 and have taken 21 rounds to reach this conclusion. (Images courtesy: ANI & Canva)

As per reports, this deal will bring an investment of 100 billion dollars from EFTA countries (that will come from private firms) to India in a span of 15 years and will create about 10 lakh jobs. According to the agreement document, these countries will try to invest 50 billion dollars within 10 years of the implementation of the agreement and the remaining 50 billion dollars in the next 5 years. This investment does not cover FPI (Foreign Portfolio Investment).

Well, people who love to consume Swiss chocolates and biscuits will definitely rejoice, as the deal will reduce the import duty on these. But, it’s not just the chocolate and biscuits, India will also witness a decline in rates of seafood, Mediterranean fruits, coffee, oil, sweets, processed foods, and wine. According to this agreement, tax will be deducted equally every year during the period of 7 years. Currently, there is a duty (tax) of 30 per cent on chocolate and chocolate-related products in India.

Since Switzerland will be India’s biggest partner in this deal, according to the Global Trade Research Initiative (GTRI), 91 per cent of the products will be traded between the two countries. These products also include alcohol or wine, and the import duty on liquor will gradually decrease. The duty for Swiss wines arriving with a CIF (shipping price including cost, insurance, and freight) between $5 and $15 will be reduced from 150 per cent to 100 per cent. This will happen in the very first year. After which, it will be brought up to 50 per cent in the next 10 years.