India and the European Free Trade Association (EFTA) have taken a significant step towards deeper economic collaboration with the inauguration of the India-EFTA Desk. 

This initiative follows the recently concluded India-EFTA Trade and Economic Partnership Agreement (TEPA), which positions EFTA as the first European bloc to formalise a trade pact with India. 

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.

• EFTA’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.

• 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.

• India and EFTA signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024.

• India-EFTA two-way trade was about $24 billion in 2023-24 against $18.65 billion in 2022-23.

• Switzerland is the largest trading partner and investor in India followed by Norway in the bloc.

• India received $10.72 billion in foreign direct investment from Switzerland during April 2000 and September 2024.

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.

India-EFTA Desk

• The India-EFTA Desk will provide structured support to EFTA businesses looking to invest, expand, or establish operations in India. 

• The Desk will act as a centralised support mechanism for EFTA companies looking to expand in India.

• It will provide market insights and regulatory guidance, business matchmaking, and assistance in navigating India's policy and investment landscape.

• It will drive investment in renewable energy, life sciences, engineering, and digital transformation.

• With the official inauguration of the EFTA Desk, India and EFTA have entered a new era of economic cooperation, ensuring that businesses from both regions thrive in an era of sustainable and innovation-driven growth.

• Looking ahead, the India-EFTA Desk will serve as the primary channel for fostering continuous business-government dialogue. 

• The Indian government has pledged to work closely with EFTA partners to unlock TEPA’s full potential.

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