EFTA members are Iceland, Liechtenstein, Norway and Switzerland.
India would accrue limited gains from the proposed FTA with European Free Trade Association due to the former’s large trade deficit with Switzerland and the Swiss decision to end import duties on almost all industrial goods for all nations, economic think tank GTRI recently said.
It urged India to focus on balancing trade and protecting domestic interests.
The planned Trade and Economic Partnership Agreement in the current format will not help Indian exports and will result in higher imports and wider trade deficit, GTRI cautioned.
“The Indian side faces challenges in achieving a balanced outcome in the agreement with EFTA. There are concerns due to the large trade deficit in favour of EFTA, Switzerland’s new policy of allowing tariff-free entry for all industrial goods from any country, and limited gains for India in services,” the GTRI report said.
These factors raise questions about the fair distribution of benefits to India from the FTA with EFTA, it noted.
It urged India to navigate these negotiations with a focus on balancing trade, protecting domestic interests and securing a fair and beneficial agreement.
In fiscal 2022-23, India’s imports from Switzerland stood at $15.79 billion, in stark contrast to its exports worth $1.34 billion, leading to a substantial trade deficit of $14.45 billion. Overall gains in merchandise trade will be negative, as India will have to cut tariffs on substantial imports from Switzerland, the GTRI report said.
The EFTA countries’ request for Trade-Related Aspects of Intellectual Property Rights (TRIPS) plus protection for strengthening of intellectual property rights (IPRs), especially patents and copyrights, in India will conflict with India’s domestic regulations, the report noted.
Switzerland’s stance on India’s request for priority visas for Indian professionals could prove to be another sticking point, it added.
In fiscal 2022-23, India’s imports from EFTA were significantly higher than its exports, leading to a trade deficit of $14.8 billion.
Fibre2Fashion News Desk (DS)