In a significant development, Indian consumers can anticipate a drop in prices for a range of Swiss products such as watches, chocolates, wines, biscuits, and clocks following a trade pact between India and the European Free Trade Association (EFTA) bloc. The agreement aims to gradually phase out customs duties on these goods, opening avenues for increased trade and investments between the two regions.
The trade and economic partnership agreement (TEPA) signed between India and the four-nation EFTA bloc comprising Iceland, Liechtenstein, Norway, and Switzerland is poised to have far-reaching implications. While the implementation of the agreement may take up to a year due to the elaborate ratification process in different countries, it sets the stage for enhanced economic cooperation.
Key Highlights of the Trade Pact:
- Duty Concessions on Swiss Products: India will gradually remove tariffs on Swiss goods over a period of seven to ten years, enabling consumers to access high-quality Swiss products at more affordable prices. Famous Swiss watch brands like Rolex, Omega, and Cartier, along with Nestle chocolates, stand to benefit from the reduced customs duties.
- Tariff Reductions and Duty Elimination: The TEPA entails tariff reductions and duty elimination on various Swiss goods, including coal, medicines, dyes, fish oils, olive oil, cocoa beans, machinery, bicycle parts, smartphones, olives, coffee, medical equipment, and more. These reductions aim to stimulate trade and promote economic growth.
- Wine Duty Concessions: The agreement also outlines duty concessions for wines imported from Switzerland, similar to those offered to Australia. Wines priced between $5 and less than $15 will witness a gradual reduction in duties over ten years, fostering trade in the wine sector.
Implications for Bilateral Trade:
The India-EFTA two-way trade, which stood at $18.65 billion in 2022-23, is expected to witness a surge with the implementation of the TEPA. Switzerland emerges as India’s largest trading partner, with substantial imports of gold, machinery, pharmaceuticals, coal, optical instruments, watches, soybean oil, and chocolates. Meanwhile, India’s exports to Switzerland encompass a diverse range of industrial products, benefiting from duty-free import provisions.
While Switzerland remains a significant source of gold imports for India, the TEPA paves the way for expanded market access and increased bilateral trade opportunities across various sectors. Notably, the TEPA includes duty-free import provisions for 98% of India’s industrial exports to Switzerland, driving trade synergies and economic growth.
Looking Ahead:
As India and the EFTA bloc embark on a new phase of economic collaboration, the TEPA underscores the shared commitment to fostering trade liberalization and promoting economic prosperity. While challenges and complexities may accompany the implementation process, the trade pact heralds a promising era of enhanced trade relations and mutual benefits for both regions.