FTA with 4 European countries on the cards

India may achieve a  breakthrough in reaching a free trade agreement with four nation European Free Trade association comprising Switzerland, Norway, Iceland and Liechtenstein as negotiations for a free trade agreement with the bloc are at an advanced stage as both sides have reached a shared understanding on key issues, a senior commerce ministry official was quoted by media reports.

Meanwhile negotiations for a free trade agreement with European union countries have been on for nearly two decades but no breakthrough so far

India and the 4 nation EFTA have been negotiating the pact, officially described as Trade and Economic Partnership Agreement (TEPA), since January 2008 to boost economic ties.

“Following extensive negotiations, a shared understanding has been achieved on key issues during the ministerial meeting. Ongoing efforts are now focused on shaping the convergence that has emerged,” the official said.

The last round of talks between the countries concluded on January 13 here.

Negotiations are held on various chapters, including trade in gods, rules of origin, intellectual property rights (IPRs), trade in services, investment promotion and cooperation, trade and sustainable development, and trade facilitation. EFTA has 29 free trade agreements (FTAs) with 40 partner countries, including Canada, Chile, China, Mexico, and Korea.

Under free trade pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.

EFTA countries are not part of the European Union (EU). It is an inter-governmental organization for the promotion and intensification of free trade. It was founded as an alternative for states that did not wish to join the European community.

India’s exports to EFTA countries during 2022-23 stood at 1.92 billion US dollars against 1.74 billion US dollars in 2021-22. Imports aggregated at 16.74 billion US dollars during the last fiscal compared to 25.5 billion US dollars in 2021-22.The trade gap is in favour of the EFTA group, according to the data of the commerce ministry.