The European Free Trade Association (EFTA) has pledged a landmark investment of $100 billion in India over the next 15 years, a move that is expected to catalyse total investments worth $400-500 billion in the country. The announcement was made by India’s Commerce and Industry Minister, Piyush Goyal, on Monday, emphasising the significant economic impact of the Trade and Economic Partnership Agreement (TEPA) signed in March 2024 between India and the EFTA nations—Switzerland, Norway, Iceland, and Liechtenstein.
As part of this agreement, European Free Trade Association member states will gain preferential tariff access to the Indian market in exchange for their investment commitments. The pledged investments are required to generate at least 1 million direct jobs, with total direct and indirect job creation expected to range between 4 million and 5 million. This initiative aligns with India’s larger economic objectives, fostering industrial growth and strengthening trade ties with Europe.
EFTA Desk to Facilitate Investments
To streamline and facilitate these investments, a dedicated EFTA Desk has been inaugurated at Invest India. The initiative was launched jointly by Minister Piyush Goyal and key EFTA officials, including Swiss State Secretariat for Economic Affairs (SECO) Helene Budliger Artieda, Norway’s State Secretary of Trade and Industry Tomas Norvoll, Iceland’s Permanent Secretary of State Martin Eyjolfsson, and Liechtenstein’s Minister of Foreign Affairs, Education, and Sports Dominique Hasler.
“This desk will operate across all ministries within the central government and engage with state governments as needed. It will accelerate the $100 billion investment, simplify business processes, facilitate the smooth flow of capital and resources, and address potential concerns proactively,” Goyal stated.
Additionally, a corresponding office will be established in the EFTA region to maintain seamless engagement with businesses from these countries.
Opportunities in Industrial Development
Within the 100 industrial parks built using the hub-and-spoke model and the 20 smart industrial cities that the National Industrial Corridor Development Corporation (NICDC) is developing, India is providing exclusive industrial enclaves to EFTA companies. Discussions are ongoing to determine the feasibility of allocating specific zones for EFTA businesses to enhance their presence in India’s industrial sector.
Norwegian Minister Tomas Norvoll emphasised the high level of interest from EFTA businesses in the Indian market. “If the commercial conditions are favourable, we expect a substantial expansion of trade and investment from EFTA countries in the coming years,” he stated.
Despite the strengthened trade relations, India faces a significant trade deficit with EFTA nations. In 2023-24, India’s exports to EFTA amounted to $1.94 billion, a modest 0.8% increase from the previous year, while imports surged 31% to reach $22 billion. Switzerland accounted for the majority of imports, with trade worth $21.2 billion, largely driven by gold and precious stone transactions valued at $18 billion.
Norway is the next-largest investor and trading partner from the EFTA bloc after Switzerland. Between April 2000 and September 2024, India received $10.72 billion in foreign direct investment from Switzerland, reinforcing its dominant role in bilateral economic ties.
The $100-billion investment commitment from EFTA nations represents a crucial step in deepening Indo-European economic relations. By fostering industrial growth, creating employment, and facilitating capital inflows, this initiative holds the potential to significantly enhance India’s global trade standing. With dedicated support structures like the EFTA Desk and industrial enclaves, India is positioning itself as a key destination for European investments, setting the stage for long-term economic collaboration and mutual prosperity.