As the year draws to a close, we reflect on the transformative developments strengthening the bonds between India and Switzerland. This year marked a milestone with the signing of the India-EFTA Trade and Economic Partnership Agreement (TEPA), which is set to redefine economic collaboration between India and Switzerland. TEPA stands as the first Free Trade Agreement with a commitment to targeted investments and job creation, promising to deliver $100 billion in FDI and 1 million jobs in India over the next 15 years. This transformative agreement promises to enhance bilateral trade, streamline market access, and unlock investment opportunities for businesses in both countries.
Europe’s FDI in India has reached USD 107 billion between FY 2000 and FY 2023, with Switzerland emerging as one of India’s key trade partners. Key sectors driving this trade include chemicals, precision machinery, and pharmaceuticals. Switzerland’s strong economic ties with India reflect their strategic collaboration and the growing demand for Swiss products, which underscore their quality and relevance in the Indian market.
One of TEPA’s key features is its extensive tariff concessions, covering 99.6% of India’s exports under 92.2% of EFTA’s tariff lines. Indian exporters gain 100% access to non-agricultural products, along with concessions on processed agricultural goods, while Swiss exporters benefit from reduced tariffs on 95% of industrial exports to India.
TEPA also establishes Switzerland as a strategic base for Indian businesses to access EU markets, given that 40% of Swiss exports are EU-bound. With 128 Swiss sub-sectors covered, the agreement encourages sectoral collaboration in key industries such as chemicals, pharmaceuticals, and precision machinery. Switzerland’s robust trade ties with India are underscored by its position as India’s largest European import partner, accounting for $21.24 billion in imports during FY23-24. While Chemical sector supports India’s exports and engineering products dominate India’s imports, reinforcing a mutually beneficial trade dynamic. This partnership not only highlights the quality and importance of Swiss products in Indian markets but also underscores India’s rising influence as a global trade hub.
Currently, over 300 Swiss corporations operate in India, and TEPA’s provisions are set to encourage not only more large companies but also SMEs to tap into India’s rapidly growing market, projected to grow by 6-9% annually. In a nutshell, TEPA is poised to catalyse economic synergy, fostering innovation, investment, and sustainable growth for both nations. With its far-reaching implications, this agreement strengthens India and Switzerland’s commitment to building a future of shared prosperity. We look forward to seeing the continued success of this economic partnership.