India-EFTA Trade & Economic Agreement: A Win-Win Deal

In March, India marked a pivotal milestone in its pursuit of sustainable development, economic growth, and strengthening of its international trade presence by signing the Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA). Established in 1960, EFTA serves as an intergovernmental organization dedicated to fostering free trade and economic integration between its four non-EU Member States: Switzerland, Iceland, Norway and Liechtenstein.

It has taken 21 rounds of negotiations, commencing back in 2008, to finally ink a “modern and ambitious Trade Agreement” with an important economic bloc out of the three (EU and UK being the other two) in Europe.

Trade Agreements are arrangements between two or more countries that primarily agree to reduce or eliminate customs tariff and non-tariff barriers on substantial trade between them. Trade Agreements, normally cover trade in goods, and services, including Intellectual Property rights, investment, government procurement and competition policy, etc.

Under a Trade Agreement, duty concessions are required to be extended only to such imported goods that are ‘made in’ the exporting country. Each Trade Agreement contains a set of rules of origin, which prescribe the criteria that must be fulfilled for goods to attain ‘originating status’ in the exporting country. Such criteria are generally based on factors such as domestic value addition and substantial transformation in the course of manufacturing/processing.