India and the four European nations that make up the European Free Trade Association (EFTA) recently met in New Delhi and stated their desire to pick up the trade and economic partnership agreement (TEPA) discussions, which have been on hold since last year. Read here to learn more about EFTA.
The four EFTA States are competitive in several sectors vital to the global economy and score among the highest in the world in competitiveness, wealth creation per inhabitant, life expectancy, and quality of life.
- Switzerland is a world leader in pharmaceuticals, biotechnology, machinery, banking, and insurance.
- Liechtenstein, like Switzerland, is highly industrialized and specializes in capital-intensive and Research & Development driven technology products.
- The Icelandic economy benefits from renewable natural resources, not least rich fishing grounds, and has increasingly diversified into other industries and services.
- Abundant natural resources also contribute significantly to Norway’s economic strength, including oil and gas exploration and production, and fisheries, as well as important service sectors such as maritime transport and energy-related services.
European Free Trade Association (EFTA)
The European Free Trade Association (EFTA) is the intergovernmental organization of Iceland, Liechtenstein, Norway, and Switzerland.
- These countries are not part of the European Union (EU).
It was set up in 1960 by its then seven Member States for the promotion of free trade and economic integration between its members.
EFTA was founded by the Stockholm Convention in 1960.
- EFTA was founded as an alternative for states that did not wish to join the European Community (EC).
- EFTA was founded by the Stockholm Convention on May 3, 1960, with Austria, Denmark, Great Britain, Norway, Portugal, Sweden, and Switzerland as its founding members.
India and European Free Trade Association (EFTA)
Negotiations on a broad-based Trade and Investment Agreement (TEPA) between the EFTA States and India were officially launched in January 2008 following consideration of the recommendations of a Joint EFTA-India Study Group.
13 rounds of negotiations were held until autumn 2013 before negotiations were put on hold. After talks were resumed in October 2016, four more rounds have taken place.
The negotiations between the two sides have been focussed on-
- Trade in Goods & Services
- Sanitary and Phyto-Sanitary (SPS) measures
- Technical Barriers to Trade (TBT), Customs and Tariff Facilitation (TF), Investment
- Intellectual Property Rights (IPRs)
- Government Procurement (GP)
- Dispute Settlement (DS)
- Trade Defence (TD)
- Rules of Origin (RoO)
- Sustainable Development (SD) and Legal & Horizontal.
The TEPA is a comprehensive agreement that addresses investment, intellectual property rights, government procurement, trade facilitation, trade remedies, dispute resolution, and other areas of shared interest. It also includes trade in products and services, as well as investment and investment-related issues.
- The TEPA intends to remove/reduce tariffs and non-tariff barriers on a variety of items to open up prospects for trade and investment between India and EFTA.
- It intends to offer service providers and investors fair and transparent market access conditions and will improve collaboration on intellectual property rights protection and enforcement.
- TEPA strives to streamline trade processes, customs cooperation, and efficient dispute resolution procedures.
EFTA represents around 2.5% of India’s total merchandise trade in 2020–21, ranking as its ninth-largest trading partner.
- India primarily exports textiles, chemicals, gems & jewelry, machinery, and medicines to EFTA.
- Machinery, chemicals, precious metals, and medical equipment are among India’s significant EFTA imports.
India- Iceland relations
India-Iceland relations have been warm and friendly. India and Iceland have, despite the distance, reached out to each other to build a friendship based on shared values and mutuality of interests.
- India and Iceland established diplomatic ties in 1972, and since 2005, high-level visits and exchanges have helped to deepen those ties.
- Several bilateral agreements/MOUs have been signed between India and Iceland. These include Double Taxation Avoidance, Bilateral Investment Promotion, and Protection, Air Services, Sustainable Fisheries Development, Energy, Earthquake prediction research, Cultural Exchange Programmes, etc.
- Renewable energy, the fish industry, leather from fish skin, Data Centres, downstream activities in energy-intensive industries like solar panels and polysilicon, electric cars, Lithium batteries, carbon fiber, etc. are promising areas for cooperation.
Iceland supports India’s candidature for a permanent seat at the UN Security Council.
India and the Principality of Liechtenstein established diplomatic relations in 1993.
Trade between the two countries has been up and down over the years.
- The main commodities exported by India to Liechtenstein are metal alloys, stones, machine tools, mechanical seals, basmati rice, and petroleum products.
- The major commodities imported by India from Liechtenstein are mechanical appliances and parts, electrical machinery and equipment, dies pigments and other coloring products, glass, and glassware, articles made of aluminum and other base metals, and medical, surgical, and other precision instruments.
The European Free Trade Association (EFTA) states, for their part, are keen to push forward the negotiations given India’s current track record of speedily finalizing trade deals with Australia and the UAE.
There are possibilities for collaboration in healthcare, telemedicine, education, and technological advancements, between India and EFTA.
-Article written by Swathi Satish