Swiss govt begins process for ratification of EFTA-India trade agreement
28 Oct 2024
The Swiss government has submitted the free-trade agreement (FTA) signed between India and the European Free Trade Association (EFTA) to the Parliament, setting in motion the process for ratification of the deal that would open up the Indian market to Swiss exports.
Switzerland is the largest economy among the 4-nation EFTA, which also has Iceland, Norway, and Liechtenstein as members. Together, the EFTA members will also bring in $100 billion in fresh investment to India, as per the deal.
A press statement issued by the Swiss government said the parliament is expected to debate the issue in the upcoming winter or spring sessions.
Ahead of the parliamentary process, the trade deal will be put to public consultations, through cantons, civil society and business communities. If the public consultations lead to a challenge with peoples groups or political parties seeking a referendum, the parliamentary process will have to wait.
An EFTA-Indonesia free trade agreement, signed in 2018, had to wait until 2021 for implementation after a Swiss non-government organisation Public Eye triggered a referendum over deforestation in Indonesia for palm tree cultivation and the declining number of orangutans. Although the government won by a narrow majority of 51 per cent, it delayed implementation of the FTA until 2021.
The EFTA-India pact, which took 16 years in its making, helped Switzerland and its four partners become the first in Europe to enter into an FTA with India.
Once the FTA comes into force, 94.7 per cent of Switzerland's exports to India will get tariff relief, with some items having a transitional period.
India, on the other hand, will get FDI worth $100 billion over a period of 15 years. As per the deal, $50 billion of FDI will come within the first 10 years and the other $50 billion over the next 5 years. If this fails to materialise, India can initially withdraw tariff concessions.
