India and the four members states of the European Free Trade Association (EFTA) on Sunday signed an economic pact worth over $100 billion (€91.4 billion).

The EFTA’s members are Switzerland, Norway, Iceland and Liechtenstein, none of which are in the European Union.

The agreement must be ratified by all five signatories before it can come into effect. Switzerland plans to do so by 2025.

What do we know about the India-EFTA deal?

Under the deal, India will lift most import tariffs on industrial products from the EFTA in exchange for investment of $100 billion over 15 years, Indian Trade Minister Piyush Goyal said.

The agreement was signed after 21 rounds of negotiations over 15 years.

“It is a modern trade agreement, fair, equitable and win-win for all five countries,” Goyal said.

Switzerland’s government said that New Delhi will lift or partially remove customs duties on 95.3% of industrial imports from Switzerland either immediately or over time.

In a separate statement, Oslo said it had achieved near-zero import taxes on most Norwegian goods.

“Norwegian companies exporting to India today meet high import taxes of up to 40% on certain goods,” Norwegian Industry Minister Jan Christian Vestre said.

“With the new deal, we have secured nil import taxes on nearly every Norwegian good,” he said.

Agreement comes as Modi campaigns on economic credentials

The announcement comes as Indian Prime Minister Narendra Modi campaigns for re-election in general elections in May.

His campaign has emphasized high GDP growth over the last quarter and his government’s plans to turn India into a developed country.

Modi is aiming to achieve annual exports of $1 trillion by 2030. In recent years, India has signed trade agreements with Australia and the United Arab Emirates.

India is the EFTA bloc’s fifth-largest trading partner after the European Union, the United States, the United Kingdom and China. New Delhi’s Trade Ministry estimated two-way trade with the group amounted to $25 billion in 2023.

sdi/nm (Reuters, AFP)