India-EFTA Trade Pact Set to Boost Exports and Services from October 1
The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) will come into effect on October 1. EFTA countries will offer tariff concessions on 92.20% of tariff lines, covering 99.60% of India's exports, while India will provide concessions on 82.70% of its tariff lines. The agreement aims to enhance trade in services, particularly in IT, business services, and education sectors. It includes provisions for Mutual Recognition Agreements in professional services. High-opportunity sectors for Indian exporters include processed food products, rice, guar gum, pulses, fruits, vegetables, and cashew kernels. Currently, India's exports to EFTA nations stand at $72.37 million, with guar gum dominating the export basket.
*this image is generated using AI for illustrative purposes only.
India's trade landscape is poised for a significant shift as the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA) is set to take effect on October 1. This strategic partnership, involving Switzerland, Iceland, Norway, and Liechtenstein, aims to enhance bilateral trade and economic cooperation.
Key Highlights of the Agreement
Tariff Reductions: EFTA countries will offer tariff concessions on 92.20% of their tariff lines, covering 99.60% of India's exports. In return, India will provide concessions on 82.70% of its tariff lines, encompassing 95.30% of EFTA exports.
Services Boost: The agreement is expected to stimulate trade in services, particularly in IT, business services, and education sectors.
Professional Recognition: Provisions for Mutual Recognition Agreements in professional services, including nursing, chartered accountancy, and architecture, are included to facilitate cross-border professional mobility.
Opportunities for Indian Exporters
The TEPA opens up new avenues for Indian exporters, particularly in sectors such as:
- Machinery
- Organic chemicals
- Textiles
- Processed foods
Current Trade Scenario
India's exports to EFTA nations stood at $72.37 million, accounting for 0.41% of EFTA's total imports. Notably, guar gum dominated India's export basket, representing over 70% of the total exports to these countries.
High-Potential Sectors
The agreement identifies several high-opportunity sectors for Indian exporters:
- Processed food products
- Basmati and non-basmati rice
- Guar gum
- Pulses
- Fresh grapes and mangoes
- Vegetables
- Millets
- Cashew kernels
Implications for Trade Relations
This agreement marks a significant step in strengthening India's trade ties with the EFTA bloc. By reducing tariffs and facilitating easier market access, the TEPA is expected to boost bilateral trade volumes and diversify India's export basket to these European nations.
The inclusion of services trade and provisions for mutual recognition of professional qualifications underscores the comprehensive nature of this agreement, extending beyond mere goods trade to encompass a wider economic partnership.
As October 1 approaches, businesses on both sides are gearing up to leverage the opportunities presented by this landmark agreement. The TEPA is poised to not only enhance trade flows but also foster deeper economic integration between India and the EFTA countries.
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