• Commerce Secretary Sunil Barthwal visited Norway to discuss the possibility of an early implementation of the Trade and Economic Partnership Agreement (TEPA) between India and the four-nation European bloc EFTA.

• The agreement was inked in March. The implementation date has not yet been finalised.

• The visit was aimed at furthering the objectives of and unlocking the large market in EFTA countries for Indian exports of goods and services and push for early implementation of $100 billion investment. 

• The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.

What are the key features of TEPA?:

• TEPA was signed in March 2024.

• TEPA is a modern and ambitious Trade Agreement which India signed with four developed nations — an important economic bloc in Europe. 

• The agreement will give a boost to ‘Make in India’ and provide opportunities to the young & talented workforce. 

• EFTA is offering 92.2 per cent of its tariff lines which covers 99.6 per cent of India’s exports. 

• The EFTA’s market access offer covers 100 per cent of non-agri products and tariff concession on Processed Agricultural Products (PAP).  

• India is offering 82.7 per cent of its tariff lines which covers 95.3 per cent  of EFTA exports. India has offered 105 sub-sectors to the EFTA and secured commitments in 114 from Norway. 

• TEPA would stimulate our services exports in sectors of our key strength / interest such as IT services, business services, personal, cultural, sporting and recreational services, other education services, audio-visual services etc. Services offered from EFTA include better access through digital delivery of Services (Mode 1), commercial presence (Mode 3) and improved commitments and certainty for entry and temporary stay of key personnel (Mode 4).

• TEPA will give impetus to ‘Make in India’ and ‘Atmanirbhar Bharat’ by encouraging domestic manufacturing in sectors such as Infrastructure and connectivity, manufacturing, machinery, pharmaceuticals, chemicals, food processing, transport and logistics, banking and financial services and insurance.

• TEPA is expected to accelerate the creation of a large number of direct jobs for India’s young aspirational workforce in the next 15 years in India, including better facilities for vocational and technical training. TEPA also facilitates technology collaboration and access to world leading technologies in precision engineering, health sciences, renewable energy, Innovation and R&D.

What is FTA?

• A Free Trade Agreement (FTA) is an arrangement between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non-tariff barriers on substantial trade between them. 

• FTAs normally cover trade in goods (such as agricultural or industrial products) or trade in services (such as banking, construction, trading, etc). 

• FTAs can also cover other areas such as intellectual property rights (IPRs), investment, government procurement and competition policy, etc.

What is the European Free Trade Association (EFTA)?

• The European Free Trade Association (EFTA) is an inter-governmental organisation of Iceland, Liechtenstein, Norway and Switzerland. 

 • It was set up in 1960 by its then seven Member States for the promotion of free trade and economic integration between its members.

• There were seven founding countries: Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom (UK). They were joined by Iceland in 1970, by Finland in 1986 and by Liechtenstein in 1991. 

• Meanwhile, in 1973, Denmark and the UK joined the EU. Portugal joined the EU in 1986. Austria, Finland and Sweden joined the EU in 1995, consequently leaving EFTA.

• EFTA countries are not part of the European Union (EU).

• EFTA does not envisage political integration. It does not issue legislation, nor does it establish a customs union.

• It’s first objective was to liberalise trade between its Member States.

• EFTA countries enjoy access to one of the world’s largest networks of preferential trade relations, covering 80 per cent of EFTA’s merchandise trade.

• Currently, the EFTA States together have 30 FTAs in force or awaiting ratification covering 40 partner countries worldwide (outside Europe).

• EFTA is the European Union’s third largest trading partner in merchandise, and the second largest in services.

• India’s exports to EFTA countries during April-February 2022-23 stood at $1.67 billion as against $1.74 billion in 2021-22. Imports aggregated at $15 billion during the 11-month period as compared to $25.5 billion in 2021-22. 

• The EFTA Council is the highest governing body of EFTA. The Council usually meets eight times a year at the ambassadorial level (heads of permanent delegations to EFTA) and once a year at ministerial level.

• The EFTA Secretariat is situated in Geneva.

EFTA States

• Switzerland is a world leader in pharmaceuticals, biotechnology, machinery, banking and insurance.

• Liechtenstein, like Switzerland, is highly industrialised and specialised in capital-intensive and research & development driven technology products. 

• The Icelandic economy benefits from renewable natural resources, not least rich fishing grounds, and has increasingly diversified into other industries and services. 

• Abundant natural resources also contribute significantly to Norway’s economic strength, including oil and gas exploration and production, and fisheries, as well as important service sectors such as maritime transport and energy-related services.

(The author is a trainer for Civil Services aspirants.)