Switzerland Ratifies Landmark Trade Agreement with India: What It Means for Future Investments
Historic Trade Deal Ratified
New Delhi: Switzerland has successfully completed the ratification of a significant trade agreement with the European Free Trade Association (EFTA), aimed at reducing trade barriers and enhancing access for Swiss exports to the Indian market.
Swiss Ambassador to India, Maya Tissafi, hailed the ratification as a "major milestone" in the bilateral relations between Switzerland and India.
According to Tissafi, the Trade and Economic Partnership Agreement (TEPA) is anticipated to take effect in October.
This comprehensive trade agreement will see the EFTA nations—comprising Iceland, Liechtenstein, Norway, and Switzerland—investing USD 100 billion in India over the next 15 years.
Iceland, Liechtenstein, and Norway have already completed their ratification processes.
The TEPA was signed in March after nearly 16 years of negotiations among the four nations.
Tissafi noted on social media that the deadline for a referendum on the EFTA-India TEPA expired at midnight Swiss time, indicating the Swiss populace's implicit approval of the agreement.
The ratification by Switzerland follows the approval from the Swiss Council of States over seven months ago.
Tissafi emphasized that the TEPA will facilitate long-term collaboration between the two nations, reducing tariffs, streamlining customs processes, enhancing intellectual property rights, and establishing sustainable trade practices.
The EFTA countries' investment is projected to create one million jobs in India over the next 15 years, which Tissafi described as a "win-win situation" for all parties involved.
Currently, Switzerland ranks as the 12th largest investor in India.
Swiss investments have surged from CHF 551 million (around Rs 5,935 crore) in 2000 to CHF 10 billion (approximately Rs 1,07,736 crore) by 2024, according to the ambassador.
The TEPA is set to become effective in October, with certain product categories subject to phased tariff reductions over a decade.
Tissafi stated that the Swiss government aims to effectively implement the TEPA to support Swiss companies looking to invest in India.
To facilitate this, partnerships are being formed with business associations in both Switzerland and India, as well as with Indian authorities at various levels. The establishment of the EFTA Desk in February is one such initiative to promote investments from EFTA nations into India.
Over 330 Swiss firms operate in India across sectors like engineering, services, precision instruments, chemicals, and pharmaceuticals, while Indian businesses are active in Switzerland in IT, pharmaceuticals, and machinery.
Reflecting on the broader India-Switzerland relationship, Tissafi noted that ties have strengthened over the past 77 years since the signing of the Treaty of Friendship.
The cooperation spans various sectors, including diplomacy, trade, education, and climate change, bolstered by regular high-level exchanges.
The relationship is on a positive trajectory, with advancements from the TEPA signing to collaborative projects in climate change and environmental sustainability.
Tissafi highlighted the TEPA's role in reinforcing trade and economic relations, alongside the launch of the Swiss-Indian Innovation Platform in Bengaluru in October 2023.
This platform aims to connect Indian Institutes of Technology (IITs) and Swiss technical institutions with leading private companies from both nations to foster strategic innovation partnerships.
Swiss enterprises are involved in various sectors in India, including machine engineering, electrical engineering, and precision sectors, as well as services and software.