According to people familiar with the matter, India is close to reaching an investment agreement of up to US$100 billion with some European countries in exchange for the latter having easier access to the world's most populous country for trade activities. The European Free Trade Association, which includes Norway, Iceland, Liechtenstein and Switzerland, is understood to have committed to investing in India as part of a trade deal that is in the final stages of negotiations.
The general framework of the agreement has been agreed, and the current discussion is focused on the final investment amount, that is, European countries need to invest US$100 billion in India within 15 years. This investment is expected to create more than 1 million jobs in India.
According to a European official, India wants the investment commitment to be legally binding, but countries such as Switzerland and Norway prefer it to be set as a target without legally binding means.
Swiss Economy Minister Guy Parmelin said last month that after 16 years of negotiations, Switzerland and India have reached a consensus on a free trade agreement. The outline of the relevant trade agreement has been agreed upon, and officials are working hard to finalize the details. Parmelin also said that the agreement "will create jobs for young Indians and ensure employment in Switzerland."
The Swiss Economy Ministry said in a statement that the text of the agreement "remains to be finalized and the parties have agreed not to disclose details at this stage." The main agreements reached by the two parties include patent protection and investment promotion.
The agreement will also ensure easier access for Indian professionals to the European Free Trade Association and ensure access to this market for some agricultural products, the people said. Despite Switzerland's various protective policies for its own farmers, easier access for Indian rice to the EFTA market may be acceptable because Switzerland's own rice production is low.
Switzerland is by far India's largest business partner among EFTA members. In the 2022-23 fiscal year, bilateral trade volume between Switzerland and India was US$17.14 billion.
For European Free Trade Association members, the deal, which has been 16 years in the making, would allow manufacturers to export processed food and beverages, electrical machinery and other engineering products at lower tariffs to a massive market of 1.4 billion people. The trade deal could also benefit the EU's pharmaceutical and medical device industries.
India's rapid development has also attracted the interest of investors from many countries. In mid-January, India became the fourth largest stock market in the world. According to Morgan Stanley, India will become the third largest stock market in the world by 2030.
According to a recent economic assessment report released by the Indian Ministry of Finance, with the support of stable domestic demand and private investment, India's GDP growth rate in the next fiscal year may exceed 7%, and is likely to maintain high-speed growth in the next few years. India's growth rate will be the leader.
Indian Information Technology Minister Ashwini Vaishnaw recently stated that in the next few years, India is aiming to obtain US$100 billion in foreign direct investment (FDI) per year.
Related articles: