Switzerland’s federal government has approved the ambitious trade agreement between India and the European Free Trade Association (EFTA) and presented it to Parliament for approval.
The ambitious trade agreement struck in March between India and the European group of Norway, Switzerland, Iceland, and Liechtenstein intends to increase commerce in a variety of sectors, including pharmaceuticals, manufacturing, new technology, and machinery.
Under the huge trade accord, the four European countries want to invest USD 100 billion in India over the next 15 years.
Before the treaty may be implemented, each of the member countries must ratify it.
The Federal Council approved a dispatch on the free-trade agreement between EFTA states and India on Wednesday, according to a Swiss government statement.
The Federal Council, often known as the Swiss Federal Cabinet, is the country’s highest executive authority.
According to the announcement, the Swiss Parliament will consider the dispatch during its future winter or spring sessions.
“The agreement strengthens the competitiveness of Swiss exports in the world’s most populous country,” it stated, calling the formalisation of the trade agreement with India as a key milestone in Swiss trade policy.
It also explained the importance of the trade agreement.
“India is presently the world’s most populated nation. The increasing middle class, in particular, has enormous economic potential. However, India continues to levy very high import charges on most products,” it stated.
The new pact eliminates customs taxes on approximately 98% of Indian imports.
“After 16 years of negotiations, Switzerland and the other EFTA states have succeeded in becoming the first European partners to conclude an FTA with India,” according to the Swiss summary.
“When the deal goes into effect, 94.7 percent of Switzerland’s existing exports to India would receive tariff relief, with certain transitional periods. This would increase the competitiveness of Swiss exports to India,” it stated.
The agreement contains a chapter on investment promotion and cooperation.
“For the first time in a free-trade agreement, the EFTA states are committing themselves to various promotional activities with the aim of increasing investment in India and thereby creating jobs,” according to the summary.
“India, for its part, is endeavouring to ensure a favourable investment climate,” it further stated.
According to the release, EFTA is also the first partner with whom India has reached an agreement on a full and legally enforceable chapter on trade and sustainable development.
“This chapter includes, among other things, a promise not to depart from appropriate environmental and labour norms. It also creates a sub-committee on commerce and sustainable development,” it stated.
