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Switzerland, the biggest economy of the four-nation European Free Trade Association (EFTA), has adopted all the necessary regulatory amendments to implement the customs concessions agreed in the trade agreement with India.
The agreement that was signed in March 2024, will become operational from October 1. Other members of the EFTA are Norway, Iceland and Liechtenstein. The biggest trade partner for India within the bloc is Switzerland with a large trade of gold.
Sustainability at the core
According to a statement by the Swiss Government, for the first time India has enshrined legally binding provisions in the area of trade and sustainable development in a free trade agreement. Furthermore, the agreement contains a provision in which the parties confirm their rights and obligations under other international agreements.
From the Indian side the agreement – formally called the Trade and Economic Partnership Agreement (TEPA) – has on offer a promise of $ 100 billion in direct investments from the bloc in next 15 years.
The agreement lays down one of the objectives: “to develop their trade relations so as to contribute to the objective of sustainable development; and to contribute in this way to the harmonious development and expansion of world trade.”
“This is intended to ensure that neither the environmental and labor laws of the partner countries nor international environmental and social law are violated in connection with the agreement,” the Swiss statement said.
The agreement, however, also makes it clear that it is not their intention to harmonise the labour or environment standards of the of the countries that are part of the agreement.
Market access and trade balance
Under TEPA, India has granted Switzerland improved market access for 94.7% of its current exports, excluding gold. This includes pharmaceutical products, machinery, optical instruments, watches, and processed agricultural products.
EFTA is offering duty cuts on 92.2% of its tariff lines which covers 99.6% of India’s exports. The EFTA’s market access offer covers 100% of non-agri products and tariff concession on Processed Agricultural Products (PAP).
Overall India is offering 82.7% of its tariff lines which covers 95.3% of EFTA exports of which more than 80% import is Gold. The effective duty on Gold remains untouched. Sectors such as dairy, soya, coal and sensitive agricultural products are kept in the exclusion list.
India runs a massive trade deficit with EFTA. In 2024-25 India’s exports to the group stood at $ 1.96 billion while imports were $ 22.4 billion. A large part of the deficit is due to imports of gold from Switzerland. Last financial year India imported $ 18.1 billion dollars of gold from Switzerland.
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