WIDENING TRADE WITH EFTA COUNTRIES

New Delhi, 2 December 2006

NEW DELHI, December 3 (INFA): India is exploring a deeper and wider trade agreement with the European Free Trade Association (EFTA). The Association members are Switzerland, Norway, Leichtenstein and Iceland.

The IFTA has established a Joint Study Group to explore the possibility of entering into a broad-based trade and investment agreement. It was signed today at a meeting of the EFTA Council in Geneva in the presence of Kamal Nath, Commerce and Industry Minister, Doris Leuthard, Federal Counsellor, federal Department of Economic Affairs, Switzerland. Chairperson of the EFTA Council and Ministers from all other Member states were also present.

Announcing the setting up of the Joint Study Group, 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: The primary reason is the strong complementarities between economies on both sides. Harnessing these complementarities will result in widening and deepening our trade basket.

The strong technology orientation of EFTA states can be gainfully coupled with the huge skilled human 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.

The EFTA founded in 1960 as a means of achieving growth and prosperity amongst its member-states, as well as promoting 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.

Bilateral trade between India and EFTA in 2005-06 was US$7475.36 billion (i.e. US$7.4 billion), comprising exports of US$623.11 million and imports of US$6852.25 million. The growth in bilateral trade was 9.3% in 2005-06 over 2004-05, but while India’s exports to EFTA shrank by over 3%, imports from EFTA grew by 11 per cent.

Among the 4 EFTA member countries, India’s largest trading partner is Switzerland and followed by Norway, Iceland and Liechtenstein. ---INFA