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.

Data exclusivity pertains to a clause in the draft agreement that puts a minimum six-year embargo on clinical trial data generated during the testing and development of a drug. File
| Photo Credit: The Hindu

India has rejected the demand for ‘data exclusivity’, as part of ongoing discussions with the European Free Trade Association (EFTA) towards a free trade agreement, Sunil Barthwal, Secretary, Department of Commerce, said on the sidelines of a press briefing on Thursday.

Data exclusivity pertains to a clause in the draft agreement that puts a minimum six-year embargo on clinical trial data generated during the testing and development of a drug. Thus, manufacturers interested in making a copy-cat product would have to generate such data on their own, which is an expensive proposition, or wait out that period before applying to register and sell their version in India. Crucially, this could also apply to drugs that are not patented in India.

India’s generic drug industry has over the years made affordable versions of expensive drugs and become a large, global supplier itself, and such a clause could hamper the industry.

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Demands for data exclusivity have consistently cropped up since 2008 from the European Union and the EFTA — Switzerland, Norway, Iceland, Lichtenstein — as part of trade negotiations with India, but these have been consistently rejected. Switzerland is home to several prominent pharmaceutical companies, some of whom have been involved in litigation in India over generic drugs.

However, as The Hindu reported on Tuesday, a leaked draft of the Trade and Economic Partnership Agreement (TEPA), available on the website bilaterals.org, an organisation that tracks international free trade agreements, suggested that this clause was present in the negotiating text even as India and the EFTA indicated that negotiations were at an “advanced stage”.

“We rejected their demand. We are with our generic industry….There is no fear for any generics industry in India. It is our very important objective for the country as a whole to see that generic drug industry is flourishing. It is contributing significantly in our exports [as] they are also growing. So, we are there to protect the interests of the generic drug industry throughout, so there is no FTA agreement in which we will be going against the industry’s interest,” Mr. Barthwal told reporters.

Concerns that such a clause would affect the availability of new drugs had prompted medical rights group Medicins Sans Frontiers (MSF) to write to Prime Minister Narendra Modi earlier this week on the potential harm from India accepting data exclusivity provisions.

“We welcome the Indian Commerce Ministry’s strong stand against the inclusion of data exclusivity in its trade talks with EFTA,” Farhat Mantoo, Executive Director, MSF South Asia, said in a statement. “We appeal to India to continue to reject all harmful intellectual property provisions in this and other trade deals that may limit India’s supply of affordable generic medicines for millions of people in India and around the world,” Dr. Mantoo said.

“For MSF in particular, these possible changes to India’s national patents and drug regulatory laws could have a significant impact for the future supply of potentially lifesaving medicines. This is because MSF relies on quality-assured vaccines and medicines made in India to treat the people in our care, with its spending on generic medicines procured from India estimated at 95% for HIV, 90% for hepatitis C antivirals, 36% on TB treatments, and 30% on vaccines,” their letter had noted.