Euronews | 8 February 2024
Switzerland and Norway could invest $100 billion in India
By Doloresz Katanich
Ties are getting stronger between India and some European economies in the form of a new free trade agreement and enormous investment plans.
Sixteen years of negotiations are coming to an end as India is concluding a first-of-its-kind trade agreement with Switzerland, Norway, Iceland and Liechtenstein, reported Bloomberg.
These countries form the European Free Trade Association (EFTA), which agreed to invest in India as part of a free trade deal, in exchange for easier access to the world’s most populous nation, a market of 1.4 billion people.
The unusual feature of this Free Trade Agreement (FTA) is that it comes with investment guarantees, however, how binding they are, is still a question for the final talks.
According to the report, citing sources with knowledge of the matter, the final amount could be as much as $100 billion for the next 15 years. However, the precise sum will also depend on some haggling during the final talks.
The road to signing is rushed so the deal could be sealed before India holds general elections in the coming months, likely starting in April.
The Swiss economy ministry said in a statement to Bloomberg that the text of the agreement is "still to be finalised" and they cannot disclose details, but confirmed that they have reached an agreement on "patent protection, which was controversial in the past, as well as a new type of investment promotion chapter."
What this trade deal is going to bring to the table
India’s bilateral trade with the EFTA nations is largely about Switzerland’s contribution, their two-way trade was worth $17.14 billion in the 2022-23 fiscal year out of $18.66 billion with the whole group, according to figures from India’s commerce ministry, cited by Bloomberg.
The media outlet also reported referring to its confidential sources, that the new deal would bring investments mainly from private businesses to India and they would be focused on manufacturing projects with potentially more than 1 million jobs created in the South Asian country.
India is hopping from trade deal to trade deal
Besides this deal between EFTA and India, another major trade deal with the UK is also being negotiated, although the end is not likely to be in sight before the elections in India this year. Talks are ongoing with the EU and Australia, too.
The Indian government has also just signed off on an investment treaty with the United Arab Emirates, and its largest sovereign wealth fund Abu Dhabi Investment Authority (ADIA) has committed to set up a $4-5 billion fund in India’s latest special finance district, called Gujarat International Finance Tec-City.
India, the world’s fifth-biggest economy, has been eyed by several major economies including the US and the EU, as businesses are increasing their efforts to get more independent from China and diversify their supply chains.
India is one of the world’s fastest-growing large economies, with an annual projected GDP growth rate of over 8%. It is also expected to be the third biggest economy by 2030, according to financial research giant S&P Global.