EFTA Commits $100 Billion Investment In India Over The Next 15 Years

New Delhi, Mar 5 (KNN) The European Free Trade Association (EFTA) has pledged a substantial USD 100 billion investment in India over a span of 15 years, focusing on key sectors such as pharmaceuticals, food processing, engineering, and chemicals.

This investment initiative comes in conjunction with the impending announcement of a free trade agreement (FTA) between EFTA and India, anticipated within a month, according to a statement by a senior government official, as reported by The Indian Express.

Switzerland predominantly exports high-quality pharmaceuticals and medical devices to India. The prospective elimination of duties within the upcoming Free Trade Agreement (FTA) could provide EFTA countries with a competitive advantage over Chinese products.

This move is expected to aid India in diversifying its imports away from lower-quality Chinese goods, as the country currently maintains some of the highest average tariffs globally, exceeding 18 per cent.

The investment commitment from EFTA nations, comprising Iceland, Liechtenstein, Norway, and Switzerland, is set to be largely sourced from provident funds (PFs) in these countries, exchanged for enhanced market access into India.

Notably, trade experts underscore the significance of this investment commitment, particularly as India holds a substantial trade deficit with Switzerland, which could potentially widen post-duty elimination following the FTA.

Among the contributors from the EFTA region is Norway's mammoth USD 1.6 trillion sovereign wealth fund, recognised as the world's largest 'pension' fund, having recorded a remarkable profit of USD 213 billion in 2023, attributed to robust returns on investments in technology stocks.

In the previous fiscal year, India's imports from Switzerland amounted to USD 15.79 billion, starkly contrasting with its exports of USD 1.34 billion, resulting in a considerable trade deficit of USD 14.45 billion.

The proposed FTA is set to witness India abolishing duties on a wide array of products, encompassing gold, machinery, and pharmaceuticals, from EFTA member nations.

Government officials emphasise that this agreement will aid India in reducing its reliance on Chinese imports, particularly in critical sectors like chemicals and pharmaceuticals, addressing a longstanding concern.

Currently, India heavily depends on Chinese imports to meet domestic demands and fulfil export orders, importing USD 3.4 billion worth of medical products and nearly USD 7 billion worth of bulk drugs, as per data from the commerce and industry ministry.

(KNN Bureau)