Context:
Recently, India and European Free Trade Association (EFTA) signed a Trade and Economic Partnership Agreement (TEPA)
Key highlights:
- EFTA committed to promote investments, with aim to increase stock of foreign direct investments by USD 100 billion (excluding Foreign Portfolio Investment) in India in next 15 years
- For the 1st time in the history of FTAs, a legal commitment is being made about promoting target-oriented investment and creation of jobs.
- TEPA provides an opportunity to integrate into EU markets – Over 40% of Switzerland’s global services exports are to the EU
- Services offered – Better access through digital delivery of Services, commercial presence, and improved commitments and certainty for entry and temporary stay of key personnel
- Provisions for Mutual Recognition Agreements in Professional Services like nursing, chartered accountants, architects etc.
European Free Trade Association (EFTA):
- An intergovernmental organization for promotion and intensification of free trade
- Present members – Iceland, Liechtenstein, Norway, and Switzerland
- These countries are not part of the European Union (EU)
- Founded by – Stockholm Convention in 1960
- With its 7 founding members – Austria, Denmark, Great Britain, Norway, Portugal, Sweden and Switzerland
- Switzerland – Largest trading partner of India followed by Norway (among EFTA countries)
- India’s 9th largest trading partner – Accounts for about 2.5% of India’s total merchandise trade
- Exports to EFTA – Textiles, chemicals, gems, and jewelry, machinery, and pharmaceuticals
- Imports from EFTA – Machinery, chemicals, precious metals, and medical instruments.
The Trade and Economic Partnership Agreement (TEPA):
- An economic partnership agreement between India and the EFTA
- Designed to promote mutual benefits for both parties, rather than being one-sided.
- Significance –
- Foster transparency, efficiency, simplification, harmonization and consistency of trade procedures
- Give impetus to “Make in India” and Atmanirbhar Bharat by encouraging domestic manufacturing in sectors such as Manufacturing, Machinery, Pharmaceuticals, etc
Read more about: Free Trade Agreement
Source: PIB
Previous Year Question Consider the following statements:1. The value of Indo-Sri Lanka trade has consistently increased in the last decade.2. “Textile and textile articles” constitute an important item of trade between India and Bangladesh.3. In the last five years, Nepal has been the largest trading partner of India in South Asia.Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2020 Prelims]
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
Answer: (b)
Explanation:
Statement 1 is not correct:
The Indo-Srilanka trade reached its peak in 2013-14 in the last decade but not consistently.
Statement 3 is not correct:
Bangladesh is India’s largest trading partner in South Asia, followed by Nepal, Sri Lanka, Pakistan.
