Will the historic India-EFTA trade pact make Swiss and other European products cheaper for Indians?

Swiss chocolates, Swiss watches and Mediterranean fruits have long captivated Indian consumers. They serve as more than just products — they are symbols of luxury, taste and indulgence, woven into the fabric of cultural appreciation and social distinction. Now, a groundbreaking shift is on the horizon, one that promises to make these sought-after items (and many others!) more accessible and affordable.

In a historic move, India has inked a momentous trade and economic partnership pact with the European Free Trade Association (EFTA), comprising Iceland, Liechtenstein, Norway and Switzerland.

This $100 billion deal aims to bolster trade and investments between the two regions, promising manifold benefits for not just the Indian economy, but also its consumers.

How Will This India-EFTA Trade Pact Benefit Indian Consumers?

This pact spells good news for Indian consumers, as the government plans to gradually phase out customs duties on imported goods, The Economic Times reports. Over time, this strategic move will allow domestic consumers to enjoy top-notch products at reduced prices.

This agreement applies to the following imports:

• Seafood and Fruits: Tuna, salmon and Mediterranean fruits
• Beverages: Coffee and wine
• Food Products: Different oils, a variety of sweets and processed foods
• Consumer Goods: Watches, smartphones, bicycle parts, medical equipment and clocks
• Industrial Products: Medicines, dyes, textiles, apparel, iron and steel products, and machinery equipment

Specific tariff reductions have been outlined for these products over time. For instance, wines priced between $5 and less than $15 will see a duty reduction from 150% to 100% in the first year, gradually scaling down to 50% over a decade.

Tariffs on cut and polished diamonds will also see a reduction from 5% to 2.5% within five years. However, India has not extended any significant tariff concession on gold. While it agreed to a 1% concession on the bound rate of 40%, the effective duty remains at 15%, offering no tangible benefits.

This tariff concession is expected to drive down the prices of these products in Indian markets, rendering them more accessible and affordable to Indian consumers.

A 'Watershed Moment' for Indian Trade: PM Modi

After a hiatus of nearly 16 years, the EFTA members have finally sealed this agreement, marking a significant milestone in their Free Trade Agreement (FTA) history. Through over 21 rounds of negotiations — discussions commenced in 2008, were suspended in November 2013 and recommenced in October 2016 — the parties diligently worked towards their culmination, resulting in this monumental agreement.

Prime Minister Narendra Modi has hailed the signing of this trade agreement as a 'watershed moment' — an event of paramount importance that will alter the course of history.

Modi also highlighted the global leadership of the EFTA countries in innovation and R&D across various sectors, which has paved the way for new avenues of collaboration and investment in domains like digital trade, banking and financial services, transport and logistics, industrial machinery, biotechnology, pharmaceuticals, chemicals, food processing and clean energy.

All in all, this trade and economic partnership agreement between India and the EFTA countries underscores a collective commitment to nurturing open, fair and equitable trade. This ‘win-win’ pact is poised to substantially boost bilateral trade and investments, profiting both regions and fostering closer economic ties, all while benefiting Indian consumers.