MFN status suspension by Switzerland not to impact EFTA trade pact with India: Commerce Secy
India and the four-nation European bloc signed a free trade agreement under which New Delhi received an investment commitment of $100 billion in 15 years from the grouping while allowing several products like Swiss watches, chocolates and cut and polished diamonds at lower or zero duties
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New Delhi: Swiss suspension of the most favoured nation clause in the Double Taxation Avoidance Agreement (DTAA) will not have any impact on the commitments signed in a trade agreement between India and the EFTA bloc, a top government official said on Monday. The Swiss government has suspended the most favoured nation (MFN), which could potentially impact Swiss investments in India and lead to higher taxes on Indian companies operating in the European nation.
India and the four-nation European Free Trade Association (EFTA) signed the agreement in March. Its members are Iceland, Liechtenstein, Norway, and Switzerland. Switzerland is the largest trading partner of India, followed by Norway in the bloc. "On EFTA, there is no impact," Commerce Secretary Sunil Barthwal told reporters here when asked whether the Swiss decision would impact the $100 billion investment commitment of the EFTA bloc under the trade pact with India.
India and the four-nation European bloc signed a free trade agreement under which New Delhi received an investment commitment of $100 billion in 15 years from the grouping while allowing several products like Swiss watches, chocolates and cut and polished diamonds at lower or zero duties. The bloc committed an investment of $100 billion -- $50 billion within 10 years after the implementation of the agreement and another $50 billion in the next five years -- which would facilitate the creation of 1 million direct jobs in India.
This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far. The commitment is the key substance of the TEPA (Trade and Economic Partnership Agreement), which took almost 16 years to conclude, for India in return for opening its markets for several products coming from the EFTA nations. The agreement is yet to be implemented. In 2023-24, India's imports from Switzerland stood at $21.24 billion, in stark contrast to its exports of $1.52 billion, leading to a substantial trade deficit of $19.72 billion. India received about $10.72 billion in foreign direct investments from Switzerland between April 2000 and September 2024.
