“We would like, with this massive principle of investment, to have a Bilateral Investment Treaty in place,” Switzerland’s state secretary for economic affairs, Helene Budliger Artieda said at the India-EFTA Prosperity Summit held to mark the TEPA coming into effect.
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$100 Billion investment commitment & clawback clause
EFTA’s market access offer covers 92.2% of its tariff lines, amounting to 99.6% of India’s exports. It includes full liberalization on non-agricultural goods and tariff concessions on processed agricultural products (PAP).
India, in turn, is offering concessions on 82.7% of its tariff lines, which accounts for 95.3% of EFTA’s exports to India. More than 80% of these imports are gold, with the effective duty on gold remaining unchanged under the agreement.
She said during her last visit to India she had a meeting with finance minister Nirmala Sitharaman to discuss the treaty. “I am hearing that there is a model text in preparation, but I think it’s very important that the framework conditions are in place so that as of today it (investments) really continue to flow,” Budliger Artieda added.
Of the total $100 billion investment pledge, $50 billion is expected within the first 10 years of the agreement, with the remaining half to follow in the next five years. If the pledged investments fail to materialise, India reserves the right to claw back trade concessions granted to the EFTA countries.
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Regulatory framework: The need for a new BIT
“You know, in order to get this very innovative idea of an investment pledge going, it’s actually not our money, it’s the money of our private sector, so we needed to convince them, but I can report here that they’re all fired up,” Budliger Artieda said.
Commerce and industry minister Piyush Goyal said said TEPA’s chapter on intellectual property protection, along with India’s strong IP laws and enforcement, would help attract investment far beyond the $100 billion committed.
The minister noted that the free trade agreement with the UK, signed in July, also contains an IP chapter, and a similar provision is expected in the upcoming India-EU FTA.
Meanwhile, India and the EU have completed 13 rounds of FTA negotiations. The next round is scheduled for October 6–10 in Brussels.