India nears landmark $100 bn investment pact with Switzerland, Norway

India is on the brink of finalising a trade agreement that could potentially unleash a wave of investment worth $100 billion over 15 years from a select group of European nations.

A Bloomberg report cited sources familiar with the negotiations who revealed that the European Free Trade Association (EFTA), comprising Switzerland, Norway, Iceland, and Liechtenstein, have decided to invest in India as part of a trade pact currently in the advanced stages of discussion.

Although the specific terms are yet to be disclosed, the foundational framework of the deal has been established, with deliberations now focusing on the precise investment amount.

While India aims for a legally binding commitment, European officials suggest the figure may be presented as a target without legal obligation.

If finalised, this agreement would mark a historic milestone as India secures an unprecedented investment commitment within a free trade agreement.

Switzerland’s Economy Minister Guy Parmelin hinted at the progress made, indicating that the deal’s outline has been agreed upon.

However, official details are pending legal clarifications, with efforts underway to expedite the signing process before India’s anticipated elections slated for April.

Despite attempts to reach out to India’s commerce ministry, there has been no immediate response regarding the matter.

Acknowledging the ongoing negotiations, the Swiss economy ministry emphasised that the agreement’s text is yet to be finalised, withholding specific details at this juncture.

Nevertheless, significant consensus has been reached on key areas such as patent protection and innovative investment promotion measures.

Norway’s government opted not to comment on the deal’s specifics, maintaining discretion amidst the ongoing discussions.

As Switzerland emerges as India’s foremost trading partner within the EFTA bloc, with bilateral trade reaching $17.14 billion in the 2022-23 fiscal year, this prospective agreement holds immense significance for both parties.

For the EFTA nations, the agreement, after 16 years in the making, promises expanded opportunities to export processed foods, electrical machinery, and engineering products to India, potentially reaching a market of 1.4 billion people.

Furthermore, the EFTA bloc’s pharmaceutical and medical devices sectors are poised to benefit significantly from this deal.

The United Arab Emirates is also contemplating a substantial investment of up to $50 billion in India, further underlining the country’s attractiveness to foreign investors.

The proposed investment from EFTA countries is expected to primarily stem from private enterprises and state-backed entities, targeting existing and upcoming manufacturing ventures.

Sources familiar with the discussions anticipate over 1 million job opportunities to be generated in India as a result of this investment influx.

In addition to facilitating investment, the agreement aims to streamline the movement of Indian professionals to the EFTA bloc and enhance market access for select agricultural products.

Despite Switzerland’s traditional stance of protecting its agricultural sector, negotiations suggest a willingness to consider easier market access for Indian rice due to Switzerland’s nominal domestic production.

(With inputs from Bloomberg)