India and four European countries signed a free trade pact on Sunday (Mar 10) that will create one million jobs in the South Asian country in 15 years, Indian Trade Minister Piyush Goyal said.

“It is the first time in history of the world that we are inking an agreement with a binding commitment to invest US$100 billion in India from the EFTA (European Free Trade Association) countries,” Goyal said on Sunday at a signing ceremony. “Investor confidence in India is at an all-time high.”

The European bloc comprises Switzerland, Norway, Iceland and Liechtenstein, none of which are members of the European Union.

“India-Norway bilateral relations are stronger than ever before,” Jan Christian Vestre, Norway’s trade and industry minister, said.

The economic pact has been 16 years in making and will be the first of its kind, where India will secure investment commitments under the agreement, Bloomberg earlier reported, adding to India’s appeal as one of the most sought-after market for investors looking to diversify supply chains. Goyal said the investment commitments would be from the private sector.  

The European nations will in return get easier access to processed food and beverages, electrical machinery, and to a potential market of 1.4 billion people in one of the world’s fastest-growing major economies. 

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India offers “immense opportunity for trade and investment”, Swiss Economy Minister Guy Parmelin said at the ceremony, adding that the South Asian nation would gain access to technology through the deal. 

The agreement will also benefit the pharmaceutical and medical devices industry of the bloc. Indian exporters will get liberalised access for their rice and other products to these European nations while high-end Swiss watches will become cheaper in India in a phased manner. 

The services sector will also benefit from the deal and Indian professionals will be able to move more smoothly under the arrangement. The EFTA bloc has committed to market access and non-discriminatory treatment for Indian services including in the audio-visual, accounting and auditing, legal and computer-related sectors under the pact. 

India has offered market access and non-discriminatory treatment to the accounting, health, computer, banking and insurance services of the bloc. Goyal said the free trade deal is India’s most modern agreement till date, dealing with chapters including labour, environment and gender. 

Prime Minister Narendra Modi’s government has accelerated talks with major trading partners to take advantage of the changing global world order. It is also in discussions with the UK, European Union and Australia for free trade pacts to boost local manufacturing and create jobs. Negotiations with the UK are in the final stages.

Among the EFTA bloc, Switzerland is India’s largest commercial partner and bilateral trade stood at US$17.14 billion in the 2022-23 fiscal year, out of US$18.66 billion with the whole group.

The Swiss government called the clinching of the deal a “significant milestone”, in a separate statement on Sunday. India will lift or partially remove customs tariffs on about 95 per cent of industrial imports from Switzerland, excluding gold, either immediately or over time, it said. And in a nod to the Swiss pharmaceuticals industry, the government said the deal includes “improvements” to intellectual property rights, patent procedures and the protection of “Swissness”.

The deal must be ratified by Switzerland’s parliament, which will begin that process immediately, the government said, so it can be approved by 2025 at the latest.

Swissmem, an engineering industry lobby group whose members include conglomerate ABB and elevator maker Schindler Holding, said the deal represents an “enormous opportunity” as it gives Swiss companies an advantage over competitors from the UK, China and the US who can’t take advantage of such a free-trade deal. BLOOMBERG