India is aggressively pursuing the implementation of the landmark Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA), signifying a major push towards broader global trade engagement. This strategic move underscores India’s ambition to leverage international partnerships for economic growth and diversification.
Commerce Secretary Sunil Barthwal’s visit to Norway on November 22nd served as a pivotal moment in this endeavor. His discussions with Norwegian officials, parliamentarians, and business leaders focused on expediting the ratification process for TEPA and fostering enhanced trade and investment collaborations. The meetings, which included key discussions with State Secretary Tomas Norvoll and Minister Cecilie Myrseth, centered on outlining the next steps for TEPA implementation and facilitating smoother mobility for Indian professionals.
The TEPA, signed in March 2024 with EFTA members Switzerland, Norway, Iceland, and Liechtenstein, promises unparalleled benefits for India. Offering access to EFTA markets for 99.6% of Indian exports, alongside a projected $100 billion investment plan, the agreement is poised to become a cornerstone of India’s economic diplomacy. This potential is particularly significant given the recent widening of India’s trade deficit with EFTA countries in 2023-24, where exports reached $1.94 billion while imports surged to $22 billion. While imports were lower than the $25.5 billion recorded in 2021-22, the increase underscores the need for strategic trade agreements to balance this imbalance.
The substantial benefits offered by TEPA are undeniable. The EFTA’s concessions include tariff reductions on 92.2% of its tariff lines, impacting 99.6% of Indian exports. This translates to full market access for non-agricultural products and significant concessions for processed agricultural products. In return, India has offered concessions on 82.7% of its tariff lines, covering 95.3% of EFTA exports, demonstrating a balanced and mutually beneficial approach.
This agreement is perfectly aligned with India’s ‘Make in India’ and ‘Atmanirbhar Bharat’ initiatives, promoting domestic manufacturing across diverse sectors, including pharmaceuticals, machinery, food processing, and renewable energy. Furthermore, access to EFTA’s technological leadership in precision engineering, health sciences, and green innovation will propel India’s advancement in these critical areas. The TEPA’s potential to transform India’s economic landscape, enhance its global standing, and foster mutually beneficial partnerships positions it as a significant achievement in India’s ongoing efforts to strengthen its international trade relations. The successful implementation of TEPA will undoubtedly contribute to India’s economic growth and its emergence as a major player in the global marketplace. This agreement serves as a powerful example of India’s proactive approach to securing strategic trade partnerships, aligning with its broader economic diversification strategy and highlighting its proactive engagement on the global stage.
The progress on TEPA also reflects India’s parallel negotiations for a Free Trade Agreement (FTA) with the European Union, indicating a comprehensive and multifaceted approach to bolstering its economic ties with key global partners.
