Union Minister Piyush Goyal revealed on Saturday that a free trade agreement with the four-nation European bloc EFTA will be implemented from October 1 — making several items more affordable for Indians. The Commerce Minister however insisted that the country would only sign agreements that ‘serve national interest’ as hectic negotiations continued for a bilateral trade deal with the US. Meanwhile Prime Minister Narendra Modi is likely to visit the UK next week as both countries gear up to formalise a Free Trade Agreement.
“I have some good news. This is the first forum from which I am sharing this news. All four countries have now ratified the FTA, lodged their document with the repository, which was Norway, and from 1st October, EFTA will come into effect…” Union Minister Piyush Goyal revealed during an event in Mumbai.
What is the EFTA?
The European Free Trade Association — comprising Iceland, Liechtenstein, Norway, and Switzerland — had signed the first-of-its-kind agreement in March last year. India received an investment commitment of $100 billion in 15 years from the grouping under the pact while allowing several products, such as Swiss watches, chocolates, and cut and polished diamonds, at lower or zero duties.
The commitment is the key substance of the agreement, which took almost 16 years to conclude, for India in return for opening its markets for several products coming from the EFTA nations. The biggest trading partner of India in the bloc is Switzerland. New Delhi has low trade volumes with the remaining three countries.
India is offering 82.7% of its tariff lines or product categories, which cover 95.3 per cent of EFTA exports, of which more than 80% of imports are gold. Domestic customers will get access to high-quality Swiss products, such as watches, chocolates, biscuits, and clocks, at lower prices as India will phase out customs duties under the trade pact on these goods over 10 years. In the services sector, the commerce ministry has earlier stated that India has offered 105 sub-sectors to the EFTA, like accounting, business services, computer services, distribution and health. On the other hand, the country has secured commitments in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland.
‘India will only sign if…’
Indian authorities also concluded a fifth round of talks with their American counterparts on Thursday amid efforts to secure a bilateral trade agreement ahead of the August 1 deadline outlined by President Donald Trump. Goyal however reiterated earlier assertions on Saturday — insisting that India would only sign an international deal that was ‘good’ for the country.
“If India gets a good trade deal, we will go ahead with it. If not, we won’t. India always keeps the country’s interest first…I’ve already mentioned that we don’t negotiate through media, we negotiate in the negotiating room. Talks are ongoing, and once the team is back, we will get feedback on the response and the progress,” the Commerce Minister reiterated.
India-UK FTA
Negotiations for the India -UK FTA also drew to a close in early May with legal teams working to finalise the document. According to reports, Prime Minister Narendra Modi may visit the UK next week to witness the signing of the agreement. The document will be made public after it is signed and subsequently ratified by both countries before coming into effect.
(With inputs from agencies)