India-EFTA pact lowers costs on swiss watches and chocolates

India-EFTA Trade Deal: Under the recently signed Trade and Economic Partnership Agreement (TEPA) with European Free Trade Association (EFTA), India will steadily reduce basic customs duties on chocolates as well as wrist and pocket watches originating from Switzerland, ultimately bringing the levy down to zero. Presently, India imposes hefty tariffs of 30 per cent on chocolate imports and 20 per cent on various Swiss timepieces.

Swiss trade superiority

The deal, which awaits ratification from all parties involved, signifies a move towards boosting trade ties between India and the EFTA nations. In the fiscal year 2022-23 alone, total trade between India and the four EFTA members amounted to $18.66 billion, with Switzerland emerging as India's largest trading partner within the bloc.

Aside from chocolates and watches, the TEPA also extends concessions to other sectors. Most notably, India will eliminate duties on machinery items and medical devices from Switzerland upon the agreement's enforcement.

Wine wins wallets

Furthermore, Indian consumers can expect to savour Swiss wines at reduced rates, with duties on wines priced between $5 and $15 slated for immediate elimination, while those with higher price tags will see duty reductions over a ten-year span.

While the EFTA offers major tariff reductions covering the majority of India's exports, India reciprocates by providing access to over 80 per cent of its tariff lines, encompassing 95.3 per cent of EFTA exports.

Switzerland has announced that it will gain duty-free access to the Indian market for specific agricultural products following a transition period of up to a decade.

Burgeoning middle class

Highlighting the importance of the Indian market, Switzerland stressed the potential for growth driven by its burgeoning middle class. Currently, India imposes high import tariffs on many products, prompting Switzerland to negotiate tariff reductions. Under the TEPA, India will lift or partially remove customs tariffs on 95.3 per cent of industrial imports from Switzerland (excluding gold), either immediately or with transition periods.

This move aims to boost the competitiveness of Swiss exports to India, aligning with Swiss agricultural policy and previous free trade agreements.

Broad pact coverage

Beyond trade provisions, the agreement encompasses intellectual property rights, sustainability, and investment commitments totalling $100 billion from EFTA member countries-Switzerland, Norway, Iceland, and Liechtenstein.

With both parties aiming for swift ratification, the TEPA heralds a new era of enhanced trade relations between India and the EFTA bloc, promising economic benefits and consumer delights on both sides.

(With PTI Inputs)