Q. With reference to the Trade and Economic Partnership Agreement (TEPA) signed between India and the European Free Trade Association (EFTA) countries, which of the following statement(s) is/are correct?
1.As per the agreement, India can withdraw tariff concessions if investment targets aren’t met by the EFTA countries.
2.The tariff concession, as per the agreement, applies to the gold imported from European Free Trade Association (EFTA) countries to India.
3.India’s exports to EFTA countries are expected to see a significant impact due to the agreement.
Select the correct answer using the codes given below:
Explanation –
Statement 1 is correct. The Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) countries includes a provision that allows India to withdraw tariff concessions if the expected investment targets are not met. This arrangement aims to ensure that the agreement promotes mutual growth and benefits for both parties. 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.
Statements 2 and 3 are incorrect. The tariff concessions under the TEPA do not apply to gold imports from EFTA countries to India. The agreement primarily focuses on boosting trade in goods and services, intellectual property rights, and investment. Gold, which accounts for 80% of the merchandise imports from EFTA countries, as well as dairy, soya, coal and some sensitive agricultural products have been excluded from India’s tariff concession list. India’s exports to EFTA countries are unlikely to be significantly impacted because most products already face low or zero tariffs under the Most Favoured Nation (MFN) status. For instance, approximately 98% of India’s $1.3 billion merchandise exports to Switzerland consist of industrial products with zero tariffs, while the remaining 2% are agricultural products with minimal trade values.
Source: The Hindu
