The India-EFTA Trade and Economic Partnership Agreement (TEPA) marks a significant milestone in India’s Free Trade Agreements (FTAs), emphasizing deeper economic ties with the European Free Trade Association (EFTA) countries including Switzerland, Norway, Iceland, and Liechtenstein.
Significance of TEPA
- India’s first FTA with any European country and the western world.
- Represents India’s commitment to trade liberalization amid global protectionism.
- Successful negotiation with developed countries like Switzerland and Norway.
Objectives and Provisions of TEPA
- Aims for $100 billion investment from EFTA countries into India and creation of one million jobs over 15 years.
- Provides India the option to withdraw tariff concessions if investment targets aren’t met.
- Conditions for investment realization: India’s GDP growth and return on EFTA investments.
- Investment chapter focuses on positive intent, dependent on private sector responsiveness.
Tariff Concessions and Exclusions
- India to eliminate tariffs on most products within 7-10 years.
- Beneficial for EFTA exports like seafood, fruits, coffee capsules, oils, sweets, processed foods, smartphones, medical equipment, etc.
- Tariff reduction on cut and polished diamonds and wines over specified periods.
- Exclusions: Gold, dairy, soya, coal, and sensitive agricultural products from tariff concessions.
Services Sector Liberalization
- Commitments for liberalization in services across various sectors.
- Norway’s commitments for access to Indian yoga instructors and traditional medicine practitioners.
- Simplification of qualification recognition process for service suppliers.
Trade and Sustainable Development (TSD)
- Includes commitments on environment and labor aspects, a first for India in any FTA.
- References multilateral environmental agreements and labor conventions.
- Not subject to dispute resolution, but scrutiny of implementation is expected.
Intellectual Property Rights (IPR)
- Addresses concerns of pharmaceutical and high-tech MNCs regarding intellectual property protection.
- Mandates swift rejection of “prima facie unfounded” oppositions to patent applications.
- Raises concerns over changes in India’s patent laws to align with TEPA requirements.
Conclusion
The TEPA represents a step into uncharted territory, and its long-term impact will depend on its implementation.
Multiple Choice Questions (MCQs) with Answers:
- What does TEPA stand for?
- A) Trade and Economic Policy Agreement
- B) Trade and Economic Partnership Agreement
- C) Trade and Environmental Protection Accord
- D) Trade and Employment Promotion Act
- Answer: B) Trade and Economic Partnership Agreement
- Which countries are part of the EFTA in the context of TEPA?
- A) Germany, France, Italy, Spain
- B) Switzerland, Norway, Iceland, Liechtenstein
- C) United Kingdom, Netherlands, Belgium, Sweden
- D) Poland, Czech Republic, Hungary, Slovakia
- Answer: B) Switzerland, Norway, Iceland, Liechtenstein
- What is the main objective of TEPA?
- A) To restrict trade with EFTA countries
- B) To increase tariffs on EFTA imports
- C) To facilitate deeper economic engagement with EFTA countries
- D) To promote isolationism in trade policies
- Answer: C) To facilitate deeper economic engagement with EFTA countries
- Which sector receives benefits in terms of tariff concessions under TEPA?
- A) Gold and dairy
- B) Pharmaceuticals and high-tech products
- C) Agricultural products only
- D) Smartphones and medical equipment
- Answer: D) Smartphones and medical equipment
- What is the significance of the Trade and Sustainable Development (TSD) chapter in TEPA?
- A) It focuses on increasing tariffs for sustainable products.
- B) It addresses environmental and labor aspects, a first for India in any FTA.
- C) It aims to reduce trade with developing countries.
- D) It promotes outsourcing of labor to EFTA countries.
- Answer: B) It addresses environmental and labor aspects, a first for India in any FTA.