Commerce and Industry Minister Piyush Goyal is set to travel to Switzerland on Sunday to meet with investors, a move aligned with the $100-billion investment commitment under the India-European Free Trade Association (EFTA) trade deal, signed earlier this year. The minister’s visit will also include discussions on the ratification of the trade deal by both sides. The EFTA comprises Iceland, Switzerland, Norway, and Liechtenstein.
The trade agreement between EFTA and India, signed in March after 16 years of negotiations and 21 rounds of discussions, represents a significant milestone in India’s trade and economic relations with Europe. Under the agreement, EFTA nations have committed to investing $50 billion within the first 10 years and an additional $50 billion over the subsequent five years.
To realize this foreign direct investment (FDI), India’s nominal gross domestic product (GDP) must grow by approximately 9.5 percent in dollar terms over the next 15 years. Minister Goyal emphasized the importance of this growth at an industry event organized by the Federation of Indian Chambers of Commerce & Industry (Ficci) on Wednesday, stating, “Sunday’s agenda will involve industry interaction…to see what we can do to kick-start investments. This is because $100 billion can’t happen overnight.”
The meeting in Switzerland is expected to attract significant participation from the Swiss industry. While the investments will come from private players, the governments of EFTA countries will play a supportive role in encouraging these investments. India retains the option to partially withdraw tariff concessions if the investment commitments are not fulfilled. However, Swiss State Secretary for Economic Affairs Helene Budliger Artieda, who led the negotiations on the EFTA side, clarified in March that the commitment is not legally binding on EFTA countries.
Progress on India-UK Free Trade Agreement
Minister Goyal also commented on the ongoing negotiations for a free-trade agreement between India and the United Kingdom (UK). He expressed optimism, noting that both nations are ‘deeply committed’ to finalizing the agreement. ‘The initial comments being made by the UK government are encouraging…the Labour Party is deeply committed and so is the Modi government,’ Goyal told reporters.
The recent victory of Keir Starmer as Britain’s Prime Minister, following a Labour Party landslide electoral win against the Rishi Sunak-led Conservatives, has renewed hopes for the long-pending India-UK trade deal. Negotiations have been ongoing for two and a half years, with both sides initially aiming to finalize the deal in July, after India’s general elections. However, an early election in the UK further delayed the process.
In a related move to boost domestic supply, the Indian government had banned the export of non-basmati white rice on July 20, 2023.
