Each of the signatory countries will have to ratify the pact for its roll out. | File photo
Switzerland’s federal cabinet has adopted the ambitious trade pact between India and the European Free Trade Association (EFTA) and placed it before Parliament as part of the ratification process.
The ambitious trade pact, signed in March between India and the European bloc comprising Norway, Switzerland, Iceland and Liechtenstein, aims at expanding trade across a range of areas, including pharmaceuticals, manufacturing, new technologies and machinery.
Under the mega trade deal, the four European countries are looking at making an investment of USD 100 billion in India over the next 15 years.
Each of the signatory countries will have to ratify the pact for its roll out.
On Wednesday, the Federal Council adopted a dispatch on the free-trade agreement between the EFTA states and India, the Swiss government said in a statement.
The Federal Council, which is the Swiss federal cabinet, is the highest executive authority in the country.
The Swiss Parliament is expected to debate the dispatch in the upcoming winter or spring sessions, according to the statement.
“The agreement strengthens the competitiveness of Swiss exports in the world’s most populous country,” it said, describing the firming up of the trade pact with India as a significant milestone in Swiss trade policy.
“In its dispatch, the Federal Council commends and sets out the content of the agreement and places it in the overall context of Switzerland’s relations with India,” the Swiss government said.
It also explained the significance of the trade pact.
“India is now the world’s most populous country. In particular, the growing middle class means that there is significant potential for growth. However, India still levies very high import duties on most products,” it said.
The tread deal provides for eliminating custom duties for almost 98 per cent of the imports from India.
“After 16 years of negotiations, Switzerland and the other EFTA states have succeeded in becoming the first European partners to conclude an FTA with India,” the Swiss readout said.
“When the agreement comes into force, 94.7 per cent of Switzerland’s current exports to India will enjoy tariff relief, in some cases with transitional periods. This will strengthen the competitiveness of Swiss exports in India,” it said.
The agreement includes a chapter on investment promotion and cooperation.
“For the first time in a free-trade agreement, the EFTA states are committing themselves to various promotional activities with the aim of increasing investment in India and thereby creating jobs,” the readout said.
“India, for its part, is endeavouring to ensure a favourable investment climate,” it added.
The statement said the EFTA is also the first partner with which India has agreed on a comprehensive and legally-binding chapter on trade and sustainable development.
“This chapter includes, among other things, a commitment not to deviate from applicable environmental and labour standards. It also establishes a specific sub-committee on trade and sustainable development,” it said.
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First Published: Sep 05 2024 | 5:23 PM IST