The new trade and economic pact between India and the European Free Trade Association (EFTA) would not lead to an immediate surge in imports of sought-after Swiss goods like high-end watches, chocolate products and wine to India, as the concessional duties will take many years to take full effect.
However, movements of Indian professionals to the four EFTA countries – Switzerland, Norway, Iceland and Lichenstein –would become easier without much delay.
Tariffs on watches, clocks, cocoa bean and powder, malt products, tuna, trout and olive oil would be brought down to zero in seven years under the Trade and Economic Partnership Agreement (TEPA), according to an analysis by Global Trade Research Initiative’s founder Ajay Srivastava.
Apart from trade in goods and investment, the services sector is also an important pillar of the agreement. It aims to stimulate service exports in areas like information technology, business services, education, healthcare and audio-visual services, commerce and industry minister Piyush Goyal said.
The offer in services from EFTA would include improved commitments and certainty for entry and temporary stay of key personnel. Put simply, service professionals can look forward to easier visa norms. Easier visas for professionals have been the demand of India in all free trade agreement negotiations as it attempts to capitalize on trained manpower availability.
Branded products like Rolex, Hublot, Blancpain, Omega, Breguet, Lindt, Toblerone, Merlot, Pinot Noir and Chardonnay would cost roughly the same as now in India for next few years. On chocolate products, coffee, olives, avocado, apricot and caramel the duties will take 10 years to come down to zero.
On 750 ml bottle of wine costing less than $ 5 there will be no concession. The bottle costing between $5 to $15 duty will come down to 100% from 150 % in the first year. In 10th year duties will be brought down to 50% and stay there. In wines priced more than $15, duty in first year will be down to 75% from 150% and then at 25% in 10th year.
Importantly, no duty concession has been given on Swiss gold. The bound duty rates have been brought down to 39% from 40% in TEPA but effective rates in India are 15% so no relief there too.
Only on coal expect steam and coking coal, medicines, dyes, most textiles and apparels, iron and steel products tariffs would come down to zero immediately.
The services sector can also look forward to better access through digital delivery of services and commercial presence too in the TEPA.
“There is a significant amount of focus on ensuring professionals from both sides can engage in each other economies to ensure certainty in several sectors both in India and EFTA countries where professionals and companies can provide services,” the minister added.
It also has provision for Mutual Recognition Agreements (MRA) in professional services like nursing, chartered accountants and architects. The MRAs would recognize the professional qualifications of each other’s professionals enabling them to work freely in any of the countries part to the agreement.