How The $100bn India-Europe ETFA Trade Deal Will Benefit Indians?

India Europe Bilateral Trade (1)

The recent India-Europe ETFA trade deal has created a huge buzz among Indians as well as foreign nations! Who would have thought that the European Free  Trade Association (ETFA) would get a huge pie in the ever-growing Indian market?

India Europe ETFA Trade

Do you know what’s the interesting part? The trade deal is worth $100 billion? This amount is crazy enough to raise our eyebrows.

Here comes the million-dollar question- How will the $100 billion India-Europe ETFA trade deal benefit Indians?

Stick to this write-up and you will find out soon.

(A) Synopsis: $100 bn India-Europe ETFA Trade

India Europe Bilateral Trade (1)

Yesterday (Sunday), India just sealed a groundbreaking trade deal with Iceland, Liechtenstein, Norway, and Switzerland. Popularly people are calling it- the $100 billion India-Europe ETFA trade deal!

The goal? Creating over one million direct jobs in India over the next 15 years. Now, that’s a game-changer.

Before diving further into the details, let me briefly tell you about ETFA.

The EFTA is an intergovernmental organization comprising Iceland, Liechtenstein, Norway, and Switzerland. Unlike the European Union (EU), EFTA countries operate independently but collaborate on free trade and economic integration. India is the EFTA’s  fifth-largest trading partner, with total two-way trade reaching $25 billion in 2023. Switzerland is India’s largest trading partner within EFTA.

What’s the India-Europe ETFA trade all about? You may wonder.

Well, India is promising to cut import tariffs on industrial products from these European hotshots collectively known as the European Free Trade Association (EFTA). 

And guess what? 

This is expected to open up better-integrated supply chains, create fresh opportunities for businesses on both sides and lead to a surge in trade and investments, not to mention job creation and economic growth. The official EFTA statement spilled the beans on all this good stuff. We will discuss it later in the upcoming sections.

Piyush Goyal, India’s Commerce and Industry Minister, is over the moon about this deal. Why? Because it marks India’s first-ever agreement with a major European economic bloc. Oh, and there’s more on the horizon – India is in talks with Britain and the European Union for other trade pacts.

(B) What’s the India-Europe ETFA deal all about?

Piyush Goyal

Let’s break it down. The agreement covers everything from trading goods and services to promoting investment, intellectual property, government procurement, sustainable development, and dispute resolution. It’s like an all-inclusive package deal, giving Indian exporters a golden ticket to tap into European and global markets. Goyal is thrilled, and you should be too!

The signing ceremony went down in New Delhi, with Goyal representing India and his counterparts – Guy Parmelin (Switzerland), Bjarni Benediktsson (Iceland), Dominique Hasler (Liechtenstein), and Jan Christian Vestre (Norway) – making it official. Parmelin, the voice of the EFTA, sees this as a win-win. 

EFTA countries get a piece of India’s growth pie, diversifying their supply chains and making them sturdier. Meanwhile, India gets a boost in foreign investments from EFTA, creating some top-notch jobs.

In the past couple of years, India has been shaking hands on trade deals left and right – first with Australia, then with the United Arab Emirates. And guess what? Talks with the United Kingdom are in the final stretch. Prime Minister Narendra Modi’s got big dreams, aiming to skyrocket India’s annual exports to a whopping $1 trillion by 2030.

As part of an extensive move, India is set to ease, or partially eliminate, steep customs duties on 95.3% of industrial imports from Switzerland, excluding gold. The Swiss government, making this announcement, clarified that the adjustments would be implemented either immediately or gradually over time.

Highlighting the current scenario, Jan Christian Vestre, the Industry Minister of Norway, pointed out that Norwegian companies exporting to India currently face hefty import taxes, reaching up to 40% on specific goods. In a separate statement, he expressed enthusiasm about the new agreement, stating that it ensures zero import taxes on nearly all Norwegian goods, a significant win for bilateral trade.

So, there you have it – a game-changing deal that’s not just about numbers but about reshaping economies and creating opportunities.

(C) How the $100bn India-Europe ETFA trade deal will benefit Indians?

India Europe Bilateral Trade

The India-Europe trade deal worth $100 billion will offer the following benefits to Indians-

(C.1) Phasing Out Custom Duties: More Affordable Foreign Goods for Indians

In a strategic move, the India Europe trade deal is set to gradually eradicate custom duties on imported goods. It will be the beginning of a new era for Indian consumers. You will gain access to top-notch European products at more budget-friendly prices through this groundbreaking India-Europe deal. 

In other words, the highly desired Swiss watches, renowned for their craftsmanship, will become more accessible to the Indian market.

But the excitement doesn’t stop there – a diverse array of products is in line for a price makeover-

  • Seafood and Fruits: Tuna, Salmon, and a delightful assortment of Mediterranean fruits.
  • Beverages: Good quality of Coffee and Wine at affordable prices
  • Food Products: Different oils, an array of sweets, and an assortment of processed foods.
  • Consumer Goods: More affordable watches, smartphones, bicycle parts, medical equipment, and clocks.
  • Industrial Products: Essential industrial goods such as medicines, dyes, textiles, apparel, iron and steel products, and machinery equipment.

Now, here’s the key takeaway – the phased-out custom duties are a game-changer. This monumental trade pact doesn’t just stop at Swiss watches, chocolates, biscuits, and clocks; it involves a broad range of products. The agreement includes tariff concessions on a variety of goods imported from Switzerland. 

(C.2) Big Investment: Boosting Jobs and Industries

India-Europe trade

Guess what? The European Free Trade Association (EFTA) countries are putting their money in the most dynamic market in the world – they’re committing a solid $100 billion investment in India. Let me tell you that this isn’t just a number; it’s a game-changer. 

That big chunk of cash can kickstart economic growth, create more jobs, and ramp up the flow of trade and investments.

(C.3) Expanding Business Horizons: Access to EFTA Markets

The trade pact specifically opens avenues for Indian businesses to cater to the robust demand in EFTA countries while leveraging India’s demographic dividend.

The sectors that will benefit the most under this agreement are-

  • Pharmaceuticals
  • Garments
  • Chemicals
  • Machinery
  • Automobiles
  • Food Processing
  • Financial Services

As the doors open wider to the EFTA market, these sectors are primed to thrive, offering mutually beneficial partnerships and contributing to the overall economic advancement of both India and the EFTA nations.

(C.4) Impact on Pricing and Market Access

India Europe

Let’s dive into the nitty-gritty of the agreement – it’s all about tariffs and how they’ll change over time. Look, wines that cost between $5 and less than $15 are in for the tarris reduction.

In the first year, their duty drops from a hefty 150% to a more manageable 100%. Fast forward 10 years, and it’ll be down to just 50%. Now, that’s a gradual journey to affordability.

Moving on to something a bit more expensive product – cut and polished diamonds. Over the next five years, their tariffs are set to take a dip from 5% to a sleek 2.5%. 

So yes, there is a price cut, but for diamonds.

But, here’s the plot twist – when it comes to gold, there’s no VIP treatment. India hasn’t given any real tariff concession on gold. Sure, they agreed to a 1% cut from the bound rate of 40%, but the actual duty stays put at 15%. 

In other words, no significant benefit for gold in this deal. It’s like the one exception in the tariff reduction process.

(C.5) Crucial imports from Switzerland

Ever wondered what India brings in from Switzerland? Well, here’s the list of the key imports-

  • Gold
  • Machinery
  • Pharmaceuticals
  • Coal
  • Optical Instruments
  • Watches
  • Soybean Oil
  • Chocolates

 It’s like a diverse shopping list, ranging from precious metals to cutting-edge machinery and the sweet indulgence of chocolates. These imports play a significant role in shaping the trade dynamics between the two nations.

(C.6) Envisioning Collaboration and Innovation

Prime Minister Narendra Modi is calling the recent trade agreement a ‘Watershed moment,’ emphasizing a shared commitment to promoting open, fair, and equitable trade. In his view, the EFTA countries stand out globally for their leadership in innovation and research and development (R&D) across diverse sectors. 

This leadership paves the way for exciting opportunities in collaboration and investment. The envisioned areas of focus include-

  • Digital Trade
  • Banking
  • Financial Services
  • Transport
  • Logistics
  • Industrial Machinery
  • Biotechnology
  • Pharmaceuticals
  • Chemicals
  • Food Processing
  • Clean Energy

That’s why the experts say that India Europe ETFA is not just a trade deal, it’s a gateway to new possibilities in cutting-edge advancements and mutually beneficial partnerships.

(C.7) Boosting Bilateral Trade: Making Trade Better

The India Europe ETFA trade is no less than a booster for business. It’s expected to bring a lot of good stuff – more trade, more investments – not just for one side, but for both. The India Europte ETFA agreement is set to strengthen economic ties and promote closer collaboration. This will ultimately enhance the bilateral trade.

So yes, it is not just about numbers, it’s about building mutual prosperity through enhanced trade and investment opportunities.

(C.8) Employment Opportunities: Job Creation in India

Now, here comes the most anticipated part of this write-up. How the $100 Billion India-EFTA Trade Deal Will Create Jobs in India? You may wonder. Here’s how-

Employment OpportunitiesDetails
Investment Boost fuelling job opportunitiesThe $100 billion investment pledged by EFTA countries will inject a significant amount of capital into India’s economy. This influx of funds will stimulate economic growth and kickstart various projects, leading to the creation of new job opportunities across different sectors.
Economic Growth Drives Employment DemandAs the trade deal progresses, the expected economic growth in India will trigger an increased demand for labor. Industries expanding due to improved trade and investments will require more workers, ranging from skilled professionals to entry-level positions.
Sectoral Focus and Job Growth in Key IndustriesSpecific industries like pharmaceuticals, medical devices, food processing, and research and development (R&D) will experience substantial growth under the trade agreement. This growth translates directly into job openings within these sectors, catering to different skill levels and expertise.
Diversification Spurs Job Market ExpansionWith the diversification of India’s economy through enhanced trade, new job opportunities will emerge in previously untapped sectors. The broadening of business activities creates a ripple effect, leading to job creation in various related fields.
Streamlined Logistics and Supply ChainThe increase in trade volume necessitates an efficient logistics and supply chain network. Consequently, there will be a rise in job opportunities in transportation, warehousing, and distribution sectors as businesses strive to meet the growing demand for goods.
A Driving Force for Job Creation in Small BusinessesSmall and medium enterprises (SMEs) are expected to flourish under the trade deal. These nimble businesses have the potential to become significant job generators, contributing to entrepreneurship and localized employment growth.
Sustainable Employment GrowthThe long-term impact of the trade deal ensures sustainable job growth. As industries expand and evolve, the demand for a skilled workforce will persist, providing stable employment opportunities for India’s future workforce.
Employment Opportunities through India Europe ETFA trade

Thus, India Europe ETFA trade will act as a catalyst for job creation, economic prosperity, and a brighter future for India’s workforce.

(D) Wrapping Up: India Europte ETFA Trade Deal

In a nutshell, the $100 billion India-Europe ETFA trade holds immense benefits for Indians. This substantial investment promises job creation, economic growth, and affordable access to European goods. 

Sectors like pharmaceuticals, garments, machinery, and food processing stand to thrive, providing diverse opportunities for businesses. The tariff reductions on various products, although excluding gold, ensure a positive impact on pricing and market access. 

Prime Minister Narendra Modi’s vision of achieving $1 trillion in annual exports by 2030 aligns with the trade deal, fostering closer economic ties. 

Ultimately, this agreement signifies a promising era of prosperity, job opportunities, and mutual growth for India!

Related Posts:

Photo of author
Published By: Supti Nandi
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments