India–Europe FTA with 4 Countries Comes into Effect

India and four European countries signed a Free Trade Agreement (FTA) on March 10.
The FTA between India and the group of four European countries—Switzerland, Norway, Iceland, and Liechtenstein—members of the European Free Trade Association (EFTA), has come into force from Wednesday. This is India’s first FTA with these developed European nations.

The special feature of this agreement is that, for the first time, binding commitments related to investment and employment have been included. These four countries will invest $100 billion (around ₹8.86 lakh crore) in India over the next 15 years. This is expected to directly create around 1 million jobs.

EFTA has offered duty concessions on 99.6% of India’s exports (92% of tariff lines). India, in return, has given concessions on 82.7% of tariff lines.
However, sensitive sectors like pharmaceuticals, medical devices, processed food, dairy, soya, coal, and certain agricultural products have been protected under the agreement.

There will be no change in gold imports since over 80% of India’s imports from EFTA comprise gold.
Sectors such as IT, education, business services, and audio-visual services will be promoted.
Indian professionals in fields like nursing, chartered accountancy, and architecture will gain new opportunities through this pact.

Key Benefits:

1. What Will Get Cheaper?
   Due to lower import tariffs, several European products will become cheaper in Indian markets. Swiss wine, chocolates, clothes, biscuits, grapes, dry fruits, vegetables, coffee, and watches will cost less in India.
2. Which Indian Products Will See Higher Demand Abroad?
   Products like rice, pulses, fruits (mangoes, grapes), coffee, tea, marine products, textiles, toys, and engineering goods will gain traction in European markets, benefitting farmers, small industries, and exporters.
3. Technology Benefits:
   Advanced European technologies will flow into India—such as renewable energy, medical research, and smart electronics. This will improve living standards and strengthen India’s technological position globally.
4. Sectors That Will Benefit:
   Indian engineering goods, electronic items, chemicals, and plastic products will gain from the agreement.
5. Where Will Duties Be Removed?
   • Within 5 years: Cod liver oil, fish body oil, smartphones.
   • Within 7 years: Olive oil, cocoa, cornflakes, instant tea, machinery, bicycle parts, watches, etc.
   • Within 10 years: Avocados, apricots, coffee, chocolates, and medical equipment.
6. Service Sector Gains:
   India has granted EFTA access to 105 sub-sectors, while in return, India has received enhanced access in:
   • 128 sub-sectors from Switzerland,
   • 114 from Norway,
   • 107 from Liechtenstein,
   • 110 from Iceland.
7. Impact on Films & Creative Industries:
   European markets will open for Indian films, OTT platforms, music, and gaming companies. Bollywood and Indian digital content will gain global reach and revenue, while new opportunities will emerge for artists and production houses in the creative industry.

India’s FTA Track Record

• India has so far signed FTAs with 16 countries/blocks, including Sri Lanka, Bhutan, Thailand, Singapore, Malaysia, South Korea, Japan, Australia, UAE, UK, Mauritius, and ASEAN.
• Since 2014, India has signed 5 FTAs—with Mauritius, UAE, Australia, EFTA, and the UK.
• Negotiations are ongoing with the US, Oman, European Union, Peru, Chile, New Zealand, and Israel.