Context:
India has inaugurated an EFTA Desk to enhance trade and investment relations with EFTA nations.
European Free Trade Association (EFTA)
- Intergovernmental organization promoting free trade.
- Present members: Iceland, Liechtenstein, Norway, Switzerland (Not part of the European Union)
- Founded by: Stockholm Convention, 1960.
- 7 founding members: Austria, Denmark, Great Britain, Norway, Portugal, Sweden, Switzerland.
India and EFTA:
- Switzerland: Largest trading partner of India, followed by Norway.
- India’s 9th largest trading partner: Accounts for about 2.5% of India’s total merchandise trade.
- Exports to EFTA: Textiles, chemicals, gems, jewelry, machinery, pharmaceuticals.
- Imports from EFTA: Machinery, chemicals, precious metals, medical instruments.
EFTA Desk:
- Main contact for EFTA businesses in India.
- Provides market insights, addresses concerns, supports expansion.
- Part of the India-EFTA Free Trade Agreement (TEPA), signed in 2024.
Trade and Economic Partnership Agreement (TEPA):
- Economic partnership agreement between India and EFTA.
- Promotes mutual benefits for both parties, not one-sided.
- Significance:
- Fosters transparency, efficiency, simplification, harmonization, and consistency of trade procedures.
- Boosts “Make in India” and Atmanirbhar Bharat by encouraging domestic manufacturing in sectors like Manufacturing, Machinery, Pharmaceuticals, etc.
Key Highlights of TEPA:
- A Trade Agreement between India and EFTA, signed in 2024.
- 1st-ever Binding FTA: Commitment of $100 bn investment and 1 million direct jobs in 15 years.
- Tariff Reduction: EFTA eliminates 92.2% of tariff lines, benefiting 99.6% of India’s exports.
- Market Access: Full access for non-agri products and concessions on Processed Agricultural Products (PAP).
- Enhanced Services Access:
- Mode 1: Digital delivery of services.
- Mode 3: Commercial presence.
- Mode 4: Easier temporary stay for key personnel.
- Intellectual Property Rights (IPR): Aligns with TRIPS for strong protection.
- Professional Recognition: Covers fields like nursing, chartered accountancy, and architecture.
- Rules of Origin & Trade Remedies: Clear regulations for smooth trade and safeguarding interests.
Source: The Hindu
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.