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Economy
Mahesh

19/03/24 10:24 AM IST

FTAs with European countries

In News
  • The India-EFTA Trade and Economic Partnership Agreement (TEPA) is the latest in India’s recent Free Trade Agreements (FTAs).
Features
  • Investment: TEPA sets out a target of a $100 billion investment into India from EFTA countries, and consequent one million jobs over a 15-year period.
  • It also provides India the ability to withdraw its tariff concessions if such expected investment is not achieved.
  • A closer look at the legal text reveals that for the promised investments and jobs to materialise, two conditions need to be met: India growing at a fast rate of 9.5%, and the return on EFTA investments in India exceeding 16% annually over the 15-year timeline.
  • If not, both sides may lower their level of ambitions. If India is not satisfied, it can pull back its tariff concessions in a proportionate manner after 18 years.
  • The investment chapter is not subject to dispute resolution and is overall, a statement of positive intent, and its benefits will be dependent on the private sector’s responsiveness to the TEPA.
  • Trade in goods: the chief gain here is for EFTA’s market, which can have more access to India due to tariff concessions.
  • India is mandated to eliminate tariff on most products within seven to 10 years.
  • This will benefit EFTA exports of seafood like tuna and salmon, fruits like olives and avocados, coffee capsules, oils like cod liver and olive oil, and a variety of sweets and processed foods including chocolate and biscuits.
  • Also covered are smartphones, bicycle parts, medical equipment, clocks, and watches, many medicines, dyes, textiles, apparels, iron and steel products, and most machinery.
  • For wines, India has extended tariff cuts as follows: wines priced between $5 and less than $15 will see a duty reduction from 150% to 100% in the first year, which will then decrease gradually to 50% over 10 years.
  • For wines costing $15 or more, the initial duty cut is from 150% to 75%, eventually reducing to 25% after 10 years.
  • Trade in services: on services, both India and the EFTA members have committed to liberalisation across a wide range of sectors.
  • Some key benefits for India include commitments by Norway for access to yoga instructors and practitioners of traditional medicine from India, subject to compliance with its legal framework.
  • Both Norway and Switzerland have committed four and three years respectively for highly skilled Indian professionals moving as intra-corporate transferees, subject to obtaining work permits.
  • Intellectual property rights: the EFTA countries are home to several pharmaceutical and high technology MNCs, whose ask has been commitments on protection of intellectual property rights that exceed the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
  • The TEPA represents a nod to some of these. For example, India’s Patents Act provides for pre-grant opposition of a patent application.
  • The TEPA’s IPR Annex requires swift rejection of “prima facie unfounded” oppositions.
  • This potentially opens up India’s internal regulatory process to external scrutiny on whether this standard was met.
  • Similarly, a statutory requirement under Indian law is filing of an annual statement on working of a patent.
  • The TEPA mandates that this periodicity be increased to three years, with annual statements to be required only in specified cases, which potentially raises the concern that the statutory requirement as it exists under Indian law, may need reconsideration to make it case specific.
Source- The Hindu

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