India, EFTA move towards trade and investment agreement
New Delhi, Dec 1 2006: India and the European Free Trade Association (EFTA) on Friday set up a Joint Study Group (JSG) to explore the possibility of entering into a broad-based trade and investment agreement.
The agreement to establish the joint group was signed at a meeting of the EFTA Council, comprising the Member States Switzerland, Norway, Liechtenstein and Iceland, in Geneva today, said a Ministry of Commerce and Industry release issued here today.
Commerce and Industry Minister Kamal Nath, Federal Counsellor, Federal Department of Economic Affairs, Switzerland, Doris Leuthard, Chairperson of the EFTA Council and Ministers from all other Member States were present on the occasion.
Announcing the setting up of the JSG, Kamal Nath said, "We share a warm and friendly relationship with EFTA states. There cannot be any better way to further strengthen these relationships than by talking about enhancing trade and investment flows. We are looking forward to a deeper economic engagement with EFTA".
The reasons for exploring a deeper engagement with EFTA are manifold, with the strong complementarities between economies on both sides being the primary reason, he said.
He went on to say that harnessing these complementarities would result in widening and deepening the "trade basket".
"The strong technology orientation of EFTA States can be gainfully coupled with the huge skilled human skilled resources base of India to yield rich dividends on both sides. India’s strength in the services sector and the large service consuming economies of EFTA States present an ideal situation for enhancing trade flows in services sector. India is emerging as a major manufacturing base for the world economy. The investment potential of EFTA States can be married with India’s manufacturing capabilities to create greater economic growth on both sides," Kamal Nath explained.
The EFTA was founded in 1960 as a means of achieving growth and prosperity amongst its member states as well as promoting closer economic cooperation between western European countries.
This study would examine all aspects of the existing bilateral economic relationship between India and the EFTA and recommend measures to deepen economic engagement through an expansion of two-way trade and investment flows. It is envisaged that the bilateral trade and investment agreement will cover trade in goods and services, investment, trade facilitation, technical standards and SPS, intellectual property rights and dispute settlement.
The JSG would be co-chaired by Additional Secretary Europe Division in the Department of Commerce, Rahul Khullar, from the Indian side, and his counterpart official to be designated by the EFTA. The JSG will meet alternatively in New Delhi and Geneva and has been asked to give its report within one year. The first meeting of the JSG is scheduled to be held in February 2007.
Bilateral trade between India and EFTA in 2005-06 was 7.4 billion dollars, comprising exports of 623.11 million dollars and imports of 6852.25 million dollars. The growth in bilateral trade was 9.3 percent in 2005-06 over 2004-05, but while India’s exports to EFTA shrank by over three percent, imports from EFTA grew by 11 percent.
Among the four EFTA member countries, India’s largest trading partner is Switzerland followed by Norway, Iceland and Liechtenstein.