India and the Europe Free Trade Association (EFTA) are likely to conclude a free trade agreement (FTA) entailing a comprehensive bilateral trade and investment agreement by this year after fast tracking of the negotiations between the two groups.
“The EFTA comprising Switzerland, Iceland, Norway and Liechtenstein are likely to firm up a FTA this year. The issue came up for discussion at my bilateral meeting with Switzerland`s Economic Minister, Johann Schneider-Ammann. Both the sides agreed that they would conclude their positions within a month. We have already had seven rounds of negotiations and within a month’s time specific offers would be made. This will enable us to cover the entire Europe in a comprehensive economic and trading agreement,” Mr. Sharma remarked after his meeting with Mr. Schneider-Ammann here.
These four countries are not part of 27-nation European Union, with which India is already negotiating a FTA. Recognising the need for enhancing trade ties, a Joint Study Group between India and EFTA was established in 2006 to explore the possibility of such an agreement.
“When the FTA is concluded, we hope that there will be a significant rise in bilateral trade,” Mr. Sharma said. The trade between Switzerland and India stood at $18 Billion in 2010 up from $15 billion in 2009. Swiss exports to India include machines, pharmaceutical and chemical products as well as precision instruments. The exports from India include textiles, agricultural products and components for the airline industry. There are about 170 Swiss companies doing business in India. Switzerland has concluded such accords with about 20 countries, including Canada, Mexico, Singapore and Turkey.
With the FTA in place, Switzerland will primarily seek to improve access to the Indian market for its chemical and pharmaceutical products, machines and watches. The FTA talks have been going on since 2008 but had hit a roadblock over the deregulation of the market for industrial goods.
On its part, India has been pushing to obtain greater access to the Swiss market for its export services, including information technology, and fewer immigration restrictions. Switzerland’s labour market has been opened for citizens from the EU and EFTA countries, while permits for those from other countries are limited to highly skilled labour.
Mr. Sharma said India was seeking advance scientific research and institutional linkages with Switzerland for its various sectors. Another area of mutual cooperation has been vocational skills training modules that India strongly needs to meet the challenges that will emerge from the massive economic development taking place at present.
“We are closely looking at replicating the industrial cluster approach module and also skills training modules with the help from our Swiss counterparts. We hope the FTA will help all the sides to achieve their objective of enhance cooperation and economic engagement,” he remarked.
The last round of negotiations allowed for significant progress particularly with respect to trade in goods. Areas covered by experts groups included market access for industrial products, fish and agricultural goods; sanitary and phytosanitary measures; technical barriers to trade; rules of origin; customs procedures and trade facilitation; trade defence measures; competition; investment; intellectual property rights; and dispute settlement.
Services experts will continue their discussions in separate meetings. Both the parties agreed on a roadmap for the further process, including follow-up discussions between experts in several areas and a next full round of negotiations before mid-2011 in order to give the FTA a final shape by the end of this year.