Financial Express, India
India’s FTA with EFTA nations to include IPRs
By Ashok B Sharma
7 May 2008
A free trade agreement is slated to be finalised between India and the European Free Trade Association (EFTA) by early 2009. The EFTA countries include Iceland, Liechtenstein, Norway and Switzerland.
Apart from trade in industrial and agricultural goods and services, there would be strong focus on implementation of intellectual property rights regime. The EFTA countries and India had earlier set up a joint study group to move towards a broad-based trade and investment agreement. Based on the positive recommendations of the joint study report, it was agreed in January, 2008 to initiate negotiation for a free trade agreement (FTA).
Both sides are hopeful that such a FTA would result in a win-win situation. The Switzerland minister of economy, Doris Leuthard who is leading a business delegation to India said: “Both the economies are different, but we share common values. This can lead us to a better engagement in trade. In industrial goods India is competitive in some areas, while we are competitive in other areas. In agriculture products we do not grow tropical products which India grows. Our competitiveness is in wines and some processed food. In the services sector, India is a leader in IT, while we have technological advancements in other areas like construction.”
The Indian commerce minister Kamal Nath said that geographical indication will also find a place in the proposed India-EFTA FTA. “We also need a greater engagement of Swiss SMEs in our country,” he said.
The EFTA was founded in 1960 as a means of achieving growth and prosperity among its member states as well as promoting closer economic cooperation between countries of western Europe. EFTA now enjoys some special preferences from EU. Bilateral trade between India and EFTA grew by 9.3% to be at $7.4 billion in 2005-06, but while India’s exports to EFTA shrank by over 3%, imports from EFTA grew by 11%. India-Switzerland bilateral trade increased from 1.56 billion Swiss Francs in 2004 to 3.26 billion Swiss Francs in 2007, doubling the volume in just three years. Swiss exports to India went up to 2,310 million Swiss Francs in 2007, an increase of 22.4% over the previous year. India’s exports to Switzerland stood at only 952 million Swiss Francs. India’s exports to Switzerland are lower than that country exports to India. It was only in 2007, that India’s exports to Switzerland was seen growing at a rate higher than its imports from Switzerland.
Major items of Swiss exports to India include machinery, precious stones and metals, jewellery, pharmaceutical products, precision instruments, organic chemicals, fertilisers soap and washing preparations.
India’s exports to Switzerland mainly include organic chemicals, precious stones and metals, jewellery, agricultural products, machinery, metal and metal products, fertilisers, dyes and footwear. In the services sector, exports of IT-related services is one of India’s major item of exports, which amounted to $ 225 million in 2006-07.
Regarding foreign direct investment, Switzerland has been actively involved in India for the past many decades. About 150 Swiss companies have formed joint ventures or subsidiaries in India.
Switzerland is among the top foreign investors in India. As per cumulative FDI inflows data available from April 2000 to December 2007, Switzerland is the 10th largest foreign investor in India. Some of the Switzerland investments are routed through Mauritius. A Swiss company had invested about $1 billion in India recently and a big part of this was remitted through Mauritius. Indian companies like TCS, Infosys and Wipro have also invested in Switzerland.