India, Switzerland wrap EFTA deal

India and Switzerland have agreed on “balanced solutions” to the niggling issues derailing the European Free Trade Association (EFTA)-India trade and economic partnership agreement (TEPA), Swiss economy minister Guy Parmelin said on social platform X (formerly Twitter).

Parmelin said he “travelled directly to Mumbai/India” following the World Economic Forum in Davos after he received “a last-minute invitation” from his Indian counterpart, Piyush Goyal.

“After 16 years of negotiations we found balanced solutions to the main open issues of the EFTA-India trade agreement,” Parmelin posted on X.

At the last-minute invitation of my Indian counterpart @PiyushGoyal, I travelled directly from the WEF in Davos to Mumbai/India. After 16 years of negotiations we found balanced solutions to the main open issues of the EFTA-India trade agreement. pic.twitter.com/a7kYXMfLGw

— Guy Parmelin (@ParmelinG) January 20, 2024

“Our teams are working around the clock to settle the last details so that it can be signed as soon as possible,” Parmelin wrote in the post, while including a photograph of the negotiations with Goyal.

“It was there that we reached agreement, after 16 years of negotiations, on the broad lines of the EFTA-India trade agreement”, Parmelin wrote on X.

Goyal shared a post, along with a photograph of the negotiations on X.

“Delighted to meet the European Free Trade Association (EFTA) delegation led by Swiss Federal Councillor @ParmelinG and Swiss State Secretary for Economic Affairs, Ms. Helene Budliger Artieda,” Goyal posted.

“Discussed the progress of Free Trade Agreement (FTA) negotiations, aiming to further enhance collaboration across key sectors for mutual growth,” he added.

Delighted to meet the European Free Trade Association (EFTA) delegation led by Swiss Federal Councillor @ParmelinG and Swiss State Secretary for Economic Affairs, Ms. Helene Budliger Artieda.

Discussed the progress of Free Trade Agreement (FTA) negotiations, aiming to further… pic.twitter.com/DAwJVZ5ONa

— Piyush Goyal (@PiyushGoyal) January 20, 2024

Parmelin heads the delegation of the EFTA, which has Iceland, Liechtenstein, Norway and Switzerland as its members.

India and the EFTA states have been in talks to strike a deal since 2008, with the last of the meetings between the two top officials taking place last May. The meeting then was called a positive step towards advancing talks on the FTA.

The Swiss Federal Department of Economic Affairs, Education and Research, one of the seven departments of the federal government of Switzerland, said investment promotion is part of the final deal.

“A new chapter on investment promotion is also to be included in the agreement. India will still provide the finalized text on this subject,” Swiss media reported, citing the Federal Department of Economic Affairs, Education and Research.

The negotiations have not yet been concluded, and the two parties have agreed not to divulge any details, the media reported, citing Swiss news agency Keystone-SDA.

“In Mumbai, federal councillor Parmelin and minister Goyal found balanced solutions to the main open issues of the EFTA-India trade agreement. The main points on which we have reached agreement include patent protection, which was controversial in the past, as well as a new type of investment promotion chapter. The texts are still to be finalized and both parties have agreed not to disclose the details at this stage,” a spokesperson at the Swiss embassy in New Delhi said in a statement.

An FTA deal with India will create jobs for Indian youth and safeguard Switzerland as an industrial location, Parmelin said in an interview to Swiss newspaper SonntagsZeitung on Sunday, 21 January.

For Swiss firms, market access that is as universal as possible is vital, Parmelin added.

The Swiss tech industry is likely to be a potential beneficiary of the FTA deal, given India’s dominance in the sector.

“The Switzerland-India free trade agreement is within reach. This is excellent news for the tech industry,” Swissmem, an umbrella body of Swiss tech firms, posted on X.

Swissmem backs Parmelin “in the final sprint to achieve the broadest possible abolition of customs duties for our products,” it added.

Das Freihandelsabkommen Schweiz – Indien ist in Griffweite! Das sind hervorragende Neuigkeiten für die #Techindustrie. Swissmem unterstützt @ParmelinG im Schlussspurt, um mit einem möglichst weitgehenden Zollabbau für unsere Produkte abzuschliessen. https://t.co/iYI2RIITpW

— Swissmem (@swissmem) January 21, 2024

Switzerland’s ambassador to India, Ralf Heckner, last month expressed optimism that EFTA with  would be wrapped up before this year’s general election, Press Trust of India reported.

“Both sides have been negotiating very closely and seriously over the last more than 12 months,” Heckner said, while stressing on the importance of the deal to unlock innovation and investment opportunities.

Think tank Global Trade Research Initiative (GTRI) said earlier this month that Switzerland’s policy of allowing duty-free access for all industrial items from any country significantly affects the utility of a free trade agreement for India.

The policy shift, decided by the Swiss Federal Council and effective 1 January, involves the abolition of tariffs on all industrial products, including chemicals, consumer goods, vehicles, and clothing.

Switzerland is India’s top export destination in the EFTA and the end of import duty means that Indian products would face a higher degree of competition despite having a trade agreement.

India’s merchandise trade with EFTA countries in FY23 stood at $18.7 billion, including $1.9 billion in exports.

“Industrial goods, which account for 98% of India’s $1.3 billion merchandise exports to Switzerland in FY2023, are directly impacted,” the think tank said in the report.

Due to the intricate web of tariffs, quality standards, and licensing processes, exporting agricultural produce to Switzerland remains difficult as EFTA members are showing no interest in lowering agricultural tariffs on most essential agricultural products, the report added.

As a result of low industrial tariffs and the difficulty in selling agricultural produce to Switzerland, India’s potential advantages in merchandise exports are practically null, the report said.