India and EFTA

Why in News?

In a recent meeting held in New Delhi, India and the four European countries that form the European Free Trade Association (EFTA) have expressed their willingness to resume their negotiations for a Trade and Economic Partnership Agreement (TEPA) that has been stalled since 2018.

• The TEPA aims to boost bilateral trade and economic cooperation between the two regions by reducing tariffs and non-tariff barriers, enhancing market access, and promoting investment flows.

What is EFTA?

• EFTA is an intergovernmental organization that was established in 1960 as an alternative trade bloc for those European states that were unable or unwilling to join the European Union (EU).
  • EFTA comprises Iceland, Liechtenstein, Norway, and Switzerland, which are not part of the EU but have access to its single market through various agreements.
• EFTA is India's 9^th largest trading partner, accounting for about 2.5% of India's total merchandise trade in 2020-21.
  • The main items of India's exports to EFTA are textiles, chemicals, gems, and jewelry, machinery, and pharmaceuticals.
  • The main items of India's imports from EFTA are machinery, chemicals, precious metals, and medical instruments.

What is TEPA?

• Objective:
  • The TEPA aims to create opportunities for trade and investment between India and EFTA by eliminating/reducing tariffs and non-tariff barriers on a wide range of products.
  • It aims to ensure fair and transparent market access conditions for service providers and investors and will enhance cooperation on intellectual property rights protection and enforcement.
  • TEPA aims to facilitate trade procedures and customs cooperation along with effective mechanisms for dispute resolution.
• Coverage:
  • The TEPA is a comprehensive agreement that covers trade in goods, trade in services, investment, intellectual property rights, competition, government procurement, trade facilitation, trade remedies, dispute settlement, and other areas of mutual interest.
• Recent Highlights:
  • Participants acknowledged challenges posed by global economic and trade environment.
  • Participants agreed to address bilateral trade and economic partnership issues in a constructive and pragmatic manner.
  • India proposed to include talks on gender equality and women empowerment in TEPA negotiations.
  • India committed to promote social development along with economic growth.

How are India’s Relations with EFTA Countries?

• India and Switzerland Relations:
  • An inter-governmental framework agreement on technical and scientific cooperation was signed, leading to the launch of the Indo-Swiss Joint Research Programme
  • Skill training collaboration between both countries is facilitated through institutes such as the Bharatiya Skill Development Campus and University, Indo-Swiss Centre of Excellence in Pune, and the Vocational Training Center in Andhra Pradesh.
  • Switzerland is the 12th largest investor in India, accounting for 1.07% of total FDI in India from April 2000 to September 2019.
• India and Norway Relations:
  • The India-Norway Task Force on Blue Economy for Sustainable Development was inaugurated in 2020.
  • More than 100 Norwegian companies have established themselves in India.
  • The Norwegian Pension Fund Global is one of India's largest single foreign investors.
  • Academic collaborations exist between the Indian Institute of Technology-Madras and the Institute of Wind Energy in Chennai with institutions in Norway.
  • The Norwegian company, Piql, was involved in creating a digital archive for Indian monuments.
• India and Iceland Relations:
  • India and Iceland established diplomatic relations in 1972 and have strengthened their ties since 2005 with high-level visits and exchanges.
  • India and Iceland share common values of democracy, rule of law, and multilateralism.
  • Iceland supports India's candidature for a permanent seat at the UN Security Council.
  • India and Iceland cooperate in trade, renewable energy, science and technology, education, culture, and development.
  • Several agreements have been signed between the two countries to facilitate economic cooperation, such as a Double Taxation Avoidance Agreement.
• India and Liechtenstein Relations:
  • The two countries have friendly relations based on mutual respect and cooperation.
  • The bilateral trade between the two countries is modest, amounting to US$ 1.59 million in 2016-17.
  • The two countries have exchanged high-level visits to strengthen their ties.
  • The two countries have signed agreements to facilitate economic cooperation, such as a Double Taxation Avoidance Agreement.
  • Liechtenstein supports India's candidature for a permanent seat at the UNSC.

Source: ET