The two sides signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024. File.
| Photo Credit: PTI

READ MORE

The India-United Kingdom Comprehensive Economic and Trade Agreement (CETA) raises several questions regarding India’s commitments in the CETA’s intellectual property chapter (Chapter 13). A problematic article in this chapter is Article 13.6, “Understandings Regarding TRIPS and Public Health Measures”, in particular its first paragraph: “The Parties recognise the preferable and optimal route to promote and ensure access to medicines is through voluntary mechanisms, such as voluntary licensing which may include technology transfer on mutually agreed terms” (http://bit.ly/46zLEzj).

India’s agreeing to this provision would result in dilution of its position on two critical issues. First, India consistently backed the use of compulsory licensing as opposed to voluntary licensing, to address high prices of patented medicines. Second, India argued that advanced countries must transfer technologies to developing countries on “favourable terms”, for their industrialisation, and also for reducing their carbon footprints.

EXPLAINED | What does the new U.K.-India trade deal entail?

Issue of pricing

High prices of patented medicines are a serious anomaly of the patent system, due to excessive rent-seeking by patentees. Compulsory licensing of patented medicines can vastly improve the affordability of high-priced medicines by facilitating the production of such medicines. This was experienced following the grant of compulsory licence to Natco Pharma in 2012 for producing an anti-cancer medicine, sorafenib tosylate. The price came down to less than ₹8,800 for a month’s treatment, from the ₹2,80,428 charged by the owner of the patent on the medicine, Bayer Corporation (http://bit.ly/4lVTc4l).

For remedying such instances of excessive rent-seeking, India’s law-makers included compulsory licensing as a key safeguard while amending the Patents Act to make it compatible with the World Trade Organization’s (WTO) Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Both Houses of the Parliament unanimously adopted this legislation after a Joint Parliamentary Committee had carefully considered its provisions (http://bit.ly/4l7Z1uh).

Also Read | India, U.K. sign trade deal, PMs launch new partnership framework

Grant of compulsory licence

India’s TRIPS-consistent Patents Act allows grant of compulsory licence to anyone interested in producing a patented product in India, three years after the grant of a patent. This licence can be granted if: reasonable requirements of the public with respect to the patented invention are not satisfied; or the patented invention is not available to the public at reasonably affordable price, or the patented invention is not “worked” in the territory of India, implying, it has not been commercially exploited in the country (http://bit.ly/4lTSBjI).

Patent rules monitor “working” requirement and, accordingly, patentees must submit the working status of their inventions. They had to do so annually until this requirement was diluted through India’s FTA with the European Free Trade Association, with India agreeing that the periodicity of reporting “shall not be less than 3 years” (http://bit.ly/4o4NCxU). This dilution, has now been reinforced through the CETA, and it takes away an important ground for issuing compulsory licences.

By backing voluntary licensing to address the problem of access to medicines, India has, de facto, given up its position as a strong votary of compulsory licensing in the WTO. A coalition of developing countries, including India earned the right to issue compulsory licences through the Doha Declaration on the TRIPS Agreement and Public Health in 2001, despite strident opposition from advanced countries. The Declaration emphasised, “each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted” (http://bit.ly/3IUwjiW).

Voluntary licences cannot ensure access to affordable medicines due to the weak bargaining position of domestic companies in developing countries vis-à-vis dominant pharmaceutical corporations. Médecins Sans Frontières (MSF), a medical humanitarian organisation, observed that using the terms of voluntary licences, pharmaceutical corporations can set various limitations, including to control the supply of active pharmaceutical ingredients, besides imposing restrictions on licensees. Therefore, options for getting affordable access are compromised when voluntary licences are used (http://bit.ly/3U0j6aQ). The MSF’s observations were proven when Cipla produced the anti-COVID drug, remdesivir, in India under a voluntary licence from Gilead Sciences, the owner of the patent on the medicine. The price of remdesivir fixed by Cipla for India was, in purchasing power terms, higher than that Gilead had charged in the United States.

COMMENT | The India-U.K. FTA spells a poor deal for public health

India’s demand will be affected

The CETA undermines India’s demand for technology transfer “on favourable terms” in several multilateral forums. This demand was first made through the United Nations General Assembly Resolution on the New International Economic Order (NIEO) in 1974. A key aspect of the NIEO was the call for facilitated technology transfer from advanced to developing countries to promote the industrialisation efforts of the developing countries (http://bit.ly/41ejRRl). However, despite their best efforts, little progress was seen regarding technology transfer.

The disappointment of developing countries was reflected in India’s Fourth Biennial Update Report to the United Nations Framework Convention on Climate Change in 2024: “Despite substantial national efforts and investments, barriers like slow international technology transfer and intellectual property rights (IPR) hinder the rapid adoption of [climate friendly] technologies” (http://bit.ly/3H1ITfU).

As India has compromised its long-held position that technology transfer to developing countries must be on “favourable terms”, its demand for climate-friendly technologies from advanced countries could lose its sting.

Biswajit Dhar is former Professor of Economics at the Jawaharlal Nehru University. K.M. Gopakumar is Senior Researcher and Legal Adviser, Third World Network

Published – August 04, 2025 12:48 am IST

The Free Trade Agreement between India and the four-nation European bloc EFTA will be implemented from October 1, Commerce and Industry Minister Piyush Goyal said on Saturday (July 19, 2025).

The two sides signed the Trade and Economic Partnership Agreement (TEPA) on March 10, 2024.

Under the pact, India has received an investment commitment of $100 billion in 15 years from the grouping while allowing several products, such as Swiss watches, chocolates, and cut and polished diamonds, at lower or zero duties.

“India-EFTA TEPA to come into effect from 1st October,” Mr. Goyal said in a post on X.

The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.

The bloc has committed an investment of $100 billion — $50 billion within 10 years after the implementation of the agreement and another $50 billion in the next five years — which would facilitate the creation of 1 million direct jobs in India.

This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far.

The commitment is the key substance of the agreement, which took almost 16 years to conclude, for India in return for opening its markets for several products coming from the EFTA nations.

The biggest trading partner of India in the bloc is Switzerland.

India has low trade volumes with the remaining three countries.

In the pact, India is offering 82.7% of its tariff lines or product categories, which cover 95.3% of EFTA exports, of which more than 80% of imports are gold.

Domestic customers will get access to high-quality Swiss products, such as watches, chocolates, biscuits, and clocks, at lower prices as India will phase out customs duties under the trade pact on these goods over 10 years.

In the services sector, the Commerce Ministry has earlier stated that India has offered 105 sub-sectors to the EFTA, like accounting, business services, computer services, distribution and health.

On the other hand, the country has secured commitments in 128 sub-sectors from Switzerland, 114 from Norway, 107 from Liechtenstein, and 110 from Iceland.

Segments, where Indian services will get a boost, include legal, audio-visual, R&D, computer, accounting, and auditing.

Further, the pact would provide an opportunity for domestic exporters to integrate into the EU (European Union) markets. Over 40% of Switzerland’s global services exports are to the EU. Indian companies can look to Switzerland as a base for extending their market reach to the EU.

India-EFTA two-way trade was $24.4 billion in 2024-25.

On the tariff negotiations with the U.S., Mr. Goyal said, “Our negotiations strategy hinges on national interest. At no point of time will the Narendra Modi government ever allow national interest to be compromised”.

At the Assocham First Managing Committee Meeting FY2025-26 in Mumbai, the Minister said the world is recognising India’s strength today, and added that “the world is recognising that talent and skill are in India”. And that is what gives us that negotiation leverage”.

Stating that India is negotiating with advanced or developed countries, he said, “We are not trying to do trade deals or focus only on trade deals without competitors. We are looking at complementary economies”.

Later, talking to reporters on the sidelines of the event, Mr. Goyal said that countries which do not take care of their supply chains and ensure that supply chains are resilient will “suffer”.

“… I think India has huge domestic demand. We have imports coming into the country, which can be replaced by developing a domestic industry to scale for high-quality production,” he noted.

And ultimately, COVID taught us a big lesson, the minister said, adding that “the ban on the export of permanent magnets or fertiliser that has been imposed in the last few months teaches us a big lesson”.

Published – July 19, 2025 05:28 pm IST

Union Minister of Commerce & Industry Piyush Goyal addresses the media on the signing of the India-EFTA Trade & Economic Partnership Agreement (TEPA) along with his counterparts in New Delhi on March 10, 2024
| Photo Credit: ANI

India signed a free trade pact on March 10 with a group of European nations — Switzerland, Norway, Iceland and Liechtenstein — committing to reduce tariffs, while New Delhi will receive $100 billion in investments over the next 15 years.

India and the members of the European Free Trade Association (EFTA) held 21 rounds of talks over 16 years to clinch the broad-based Trade and Investment Agreement. Here are key facts about the trade pact:

Boost to trade, investment

India expects that the pact, following deals with the UAE and Australia, will boost exports of pharmaceuticals, garments, chemicals and machinery while attracting investments in automobiles, food processing, railways and the financial sector.

India is the EFTA’s fifth-largest trading partner after the European Union, the United States, Britain and China, with total two-way trade touching $25 billion in 2023, its trade ministry estimates. Its exports to the EFTA touched $2.8 billion and imports were about $22 billion during that period. With a population of 13 million and a combined GDP of more than $1 trillion, the EFTA nations are the world’s ninth-largest merchandise trader and its fifth largest in commercial services.

Swiss companies to benefit

Swiss manufacturers of machinery, luxury items like watches and transport are expected to benefit, the Swiss government has said. India has invited Swiss transport companies to invest in the Railways. The pact allows EFTA countries the opportunity to export processed food and beverages, electrical machinery, and other engineering products to a potential market of 1.4 billion people at lower tariffs. The pharmaceutical and medical devices industry within the bloc could also benefit.

India-Swiss relations

India hopes the pact will improve trade ties with Switzerland, the biggest partner in the EFTA. India is its fourth-largest trading partner in Asia and the largest in South Asia.

More than 300 Swiss companies such as Nestle, Holcim, Sulzer, and Novartis, apart from banks such as UBS operate in India, while Indian IT majors TCS, Infosys and HCL work in Switzerland.

No to data exclusivity

India earlier rejected the four nations’ demand for the pact to include provisions on “data exclusivity” that would make it difficult for its drug companies to produce generic variants of the off-patent drugs, Indian officials said. India and the EFTA also agreed to largely keep “sensitive” farm products and gold imports out of the pact.

Limitations of the pact

Switzerland’s policy of tariff-free entry for all industrial goods from any country, with effect from January 1, would affect benefits to Indian companies, Global Trade Research Initiative, a think tank based in New Delhi, said in a report. India is likely to keep facing difficulties in exporting farm produce to Switzerland due to a complex web of tariffs, quality standards, and approval requirements, analysts warned.

India and the four-nation European bloc EFTA ink free trade agreement on Sunday, March 10, 2024.
| Photo Credit: X@ANI

India and the four-nation European bloc EFTA on March 10 signed a free trade agreement to promote investments and boost two-way trade in goods and services.

The European Free Trade Association (EFTA) members are Iceland, Liechtenstein, Norway, and Switzerland.

The agreement has 14 chapters, including trade in goods, rules of origin, intellectual property rights (IPRs), trade in services, investment promotion and cooperation, government procurement, technical barriers to trade and trade facilitation.

“EFTA countries gain market access to a major growth market. Our companies strive to diversify their supply chains while rendering them more resilient. India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs…All in all, the TEPA will allow us to make better use of our economic potential and create additional opportunities for both India and the EFTA States,” Federal Councillor Guy Parmelin, speaking on behalf of the EFTA Member States, said.

Under free trade pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.

India and EFTA have been negotiating the pact, officially dubbed the Trade and Economic Partnership Agreement (TEPA), since January 2008. Thirteen rounds of talks were held till November 2013 before negotiations were put on hold.

Both sides resumed the negotiations in October 2023 and concluded it in a fast-track mode.

EFTA countries are not part of the European Union (EU). It is an inter-governmental organisation for the promotion and intensification of free trade. It was founded as an alternative for states that did not wish to join the European community.

India is negotiating a comprehensive free trade agreement separately with the EU, the 27-nation bloc.

India had earlier used the strategy of expediting or fast-tracking FTA negotiations successfully with the UAE and Australia.

India-EFTA two-way trade was $18.65 billion in 2022-23 compared to $27.23 billion in 2021-22. The trade deficit was $14.8 billion in the last fiscal.

Switzerland is the largest trading partner of India followed by Norway in the bloc.

‘It symbolises shared commitment to fair, equitable trade’

Prime Minister Narendra Modi said the India-EFTA trade agreement symbolises our shared commitment to open, fair and equitable trade.

He also said that the global leadership of EFTA countries in innovation and R&D across diverse spheres like digital trade, banking and financial services, and pharma will open up new doors of collaboration.

“Heartiest Congratulations and best wishes to the negotiators and signatories involved in the signing of India-EFTA Trade and Economic Partnership Agreement (TEPA),” Mr. Modi said in a written message.

The Prime Minister’s statement was read by Commerce and Industry Minister Piyush Goyal here in the presence of ministers and officials of EFTA countries.

“In the last 10 years, India’s economy has taken a quantum leap, moving from being the world’s eleventh largest economy to the fifth largest. Our next goal is to make India’s economy in the world,” the Prime Minister said.

Piyush Goyal, Minister of Commerce & Industry. File.
| Photo Credit: Kamal Narang

Union Commerce, Industry and Textiles Minister Piyush Goyal is heading for a two-day visit to London, starting Monday, to take forward negotiations for bilateral trade pacts with the United Kingdom and the four-nation European Free Trade Association (EFTA) bloc.

Mr. Goyal will engage in high-level meetings with his U.K. counterparts, including the Secretary of State for International Trade, as well as representatives from various sectors and industries. U.K.’s Minister for International Trade Nigel Huddleston said last week that half of the chapters in the proposed bilateral trade agreement had been worked out and concluded already.

“These meetings will provide an opportunity to discuss the key priorities and objectives of the Free Trade Agreement [FTA] negotiations, with a focus on addressing trade barriers, promoting investments, and fostering greater cooperation in areas such as technology, innovation, and intellectual property rights,” the Commerce Ministry said in a statement.

Meetings are also scheduled with ministers from the EFTA member-countries — Switzerland, Norway, Iceland, and Liechtenstein — to assess the progress made in the ongoing negotiations of a Trade and Economic Partnership Agreement (TEPA). The pact will strive to enhance trade and economic cooperation between India and the EFTA member-countries, fostering an environment conducive to increased investments, reduced trade barriers, and greater market access.