India-EFTA Pact: High-Quality Swiss Products, Including Watches, Expected to Become Cheaper

This week, India and the four-nation European Free Trade Association (EFTA) signed a Trade and Economic Partnership Agreement (TEPA) to enhance bilateral commerce and investment. Iceland, Liechtenstein, Norway, and Switzerland are the member countries of EFTA. 

As per a note from the EFTA Secretariat, with the Agreement's entrance into effect, the EFTA States will pledge to preserve the abolition of all customs charges on imports of industrial items, fish, and other marine products originating in India. In exchange, India will lower and remove customs duties on a major portion of industrial products originating in and currently exported from an EFTA State. The note explains that the Agreement will result in abolition of duties on most industrial commodities now supplied to India by EFTA companies, including watches. In other words, the domestic market will be able to access at lower prices high-quality products, including watches and clocks, from EFTA nations like Switzerland, as India is set to phase out, under the pact, customs duties on these goods over a period of time.

The EFTA-India TEPA was signed by Piyush Goyal, Minister of Commerce and Industry, Food and Consumer Affairs, and Textiles; Guy Parmelin, Swiss Federal Councillor and Head of the Federal Department of Economic Affairs, Education, and Research; Bjarni Benediktsson, Minister of Foreign Affairs, Iceland; Dominique Hasler, Minister of Foreign Affairs, Liechtenstein; and Jan Christian Vestre, Minister of Trade and Industry, Norway.

In a statement on TEPA, Parmelin said, “EFTA countries gain market access to a major growth market. Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs. All in all, the TEPA will allow us to make better use of our economic potential and create additional opportunities for both India and the EFTA states”.

Speaking on the occasion, Goyal said, “"TEPA is a modern and ambitious trade agreement. For the first time, India is signing an FTA with four developed nations - an important economic bloc in Europe. For the first time in history of FTAs, binding commitment of $100 bn investment  and 1 million direct jobs in the next 15 years has been given. The agreement will give a boost to ‘Make in India’, and provide opportunities to the young and talented workforce. The FTA will provide a window to Indian exporters to access large European and global markets."

However, it is believed that the agreement may take up to a year to get executed due to the lengthy ratification process.