India inks $100 bn free trade pact with 4 European nations

India signed a free trade agreement (FTA) with the four-nation European bloc EFTA on Sunday with a binding investment commitment of $100 billion over the next 15 years to facilitate the creation of 10 lakh jobs in the country.

It will take up to a year to implement the agreement due to an elaborate ratification process of the pacts in different countries.

The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway and Switzerland. This is India’s first FTA with a western bloc. The agreement was under negotiation for 16 years although suspended for five years in between. The agreement was signed here by Commerce Minister Piyush Goyal, Swiss Economics Minister Guy Parmelin, Iceland’s Foreign Minister Bjarni Benediktsson, Liechtenstein’s Foreign Minister Dominique Hasler and Norway’s Trade Minister Jan Christian Vestre.

The India-EFTA two-way trade was $18.65 billion in 2022-23 as compared to $27.23 billion in 2021-22 with Switzerland as the largest trading partner followed by Norway.

The EFTA text states that the four nations “shall aim to increase foreign direct investment” by $50 billion within 10 years and an additional $50 billion in the succeeding five years. Officials said mechanisms were in place to facilitate the assured investments and hinted that India would be well within its rights to withdraw tariff concessions if the expected investment commitments do not materialise.