Union Govt Notifies Trade Deals With New Zealand, Switzerland, Norway & Iceland; Eliminates Duty On 100% Of Indian Exports

Indian exports would be partially exempt from various Rates like Basic Customs Duty and fully exempt from Agriculture Infrastructure and Development Cess as well as Health Cess.

India also concluded two more Free Trade Agreements with Oman under a Comprehensive Economic Partnership Agreement (CEPA) and United Kingdom, specifically, a bilateral free trade agreement Comprehensive Economic and Trade Agreement (CETA). CETA provides an unprecedented duty-free access to 99% of India's exports to the United Kingdom.

Enhanced Market Access for Indian Goods

Touted as fastest concluded FTAs, India-New Zealand FTA protects its key interests in dairy and agriculture while creating an opportunity for labour intensive sectors like textile and leather.

The Trade and Economic Partnership Agreement (EFTA) with four developed European Nations, Iceland, Liechtenstein, Norway and Switzerland. ETFA covers key sectors like dairy, soya, coal, and agriculture.

The Services sector gain through digital delivery, commercial presence, professional mobility, and Mutual Recognition Agreements (MRAs) in fields such as nursing, accountancy, and architecture.

India has offered market access in 70.03% of the tariff lines while keeping 29.97 % tariff lines in exclusion. Under EFTA, the market access has been extended on 82.7% of tariff lines, accounting for 95.3% of EFTA exports, but with strong safeguards. The Press Release stated that over 80% of imports from EFTA comprise gold, where no change in effective duty has been made.

It has also been clarified that 30.00% of tariff lines will have immediate duty elimination, covering wood, wool, sheep meat, leather-raw hides etc.

Impact

The projected investment and job creation is USD 20 billion over 15 years under India-New Zealand FTA and under EFTA it has been set at $100 billion and one million direct jobs in India. In terms of Article 7.1 the four EFTA states have pledged to increase foreign direct investment (FDI) in India by $50 billion within the first 10 years, followed by an additional $50 billion in the next five years.

The India-New Zealand FTA boosts MSMEs and Jobs through Zero-duty access for labour-intensive sectors including textiles, apparel, leather, footwear, gems & jewellery, engineering goods and processed foods.

Sensitive sectors such as Dairy (milk, cream, whey, yoghurt, cheese etc.) have been kept under Exclusion under both the FTAs. Other sectors like soya, coal, pharmaceuticals, medical devices, and select food products too have been kept in the exclusion list. For products under flagship programmes like Make in India and the Production Linked Incentive (PLI) Scheme, tariff reductions are phased over 5–10 years, giving domestic industries time to strengthen before full competition opens.

Certain products that have gained under the FTAs include animal products (other than sheep meat), vegetable products (onions, chana, peas, corn, almonds etc.), sugar, artificial honey, Animal, vegetable or microbial fats and oils, Arms and Ammunition, Gems and Jewellery, Copper and Articles (Cathodes, Cartridges, Rods, Bars, Coils etc.), Aluminium and articles thereof (Ingots, billets, wire bars) among others.

Click below to read the Notifications.

References

Ministry of Commerce and Industry https://www.pib.gov.in/PressReleasePage.aspx?PRID=2207300&lang=2®=3

International Trade Administration

https://www.trade.gov/free-trade-agreement-overview

PIB Achieves

https://www.pib.gov.in/PressNoteDetails.aspx?id=156654&NoteId=156654&ModuleId=3®=3&lang=1

https://www.pib.gov.in/PressReleasePage.aspx?PRID=2206194®=3&lang=1

https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=154945&ModuleId=3®=3&lang=2