Financial Express, India
IPRs to find place in India’s FTA with EFTA nations
By Ashok B Sharma
29 April 2008
New Delhi, April 29: 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 the 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 information technology, while we have technological advancements in other areas like construction."
The Swiss delegation will be in India till May 3 and visit Mumbai and Bangalore.
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 small and medium sized industries 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 Western Europe. EFTA now enjoys some special preferences from European Union. 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 Franc 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 that the Switzerland’s 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 are machinery, precious stones and metals, jewellery, pharmaceutical products, precision instruments, organic chemicals, fertilizers, dyes, pigments, watches, metals and metal products, plastic and rubber products, soap and washing preparations.
India’s exports to Switzerland mainly consists organic chemicals, precious stones and metals, jewellery, agricultural products, machinery, metal and metal products, fertilizers, dyes, pigments, footwear, headwear, umbrellas, leather products, precision instruments. In 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 arouted through Mauritius. A Swiss company had invested about $ one billion in India in the recent past and a big part of this was remitted through Mauritius. To name a few notable Swiss companies present in India are ABB, Nestle and Holcim Majority of the Swiss companies are present in engineering and industrial equipment, services, chemicals and pharma, textiles, instruments, infotech and auto-components.
Indian companies like Tata Consultancy Services, Infosys, Wipro, Satyam and Polaris have invested in Switzerland. There is also a major flow of Indian tourists to Switzerland.