2. India's FTAs signal trade openness

• The primary benefit of the TEPA agreement lies in the increased market access it provides for EFTA countries to India through tariff concessions.
• India is obligated to phase out tariffs on a wide range of products within a span of seven to ten years under this agreement.
• This move will particularly benefit EFTA exports such as seafood like tuna and salmon, fruits like olives and avocados, coffee capsules, oils such as cod liver and olive oil, as well as various confectionery and processed food items including chocolates and biscuits.
• Additionally, products like smartphones, bicycle parts, medical equipment, clocks, watches, many medicines, dyes, textiles, apparels, iron and steel products, and most machinery will also enjoy reduced tariffs.
• Furthermore, tariffs on cut and polished diamonds will be halved from 5% to 2.5% within five years. As for wines, India has implemented tariff reductions on a gradual scale: wines priced between $5 and less than $15 will see a duty reduction from 150% to 100% in the first year, eventually decreasing to 50% over a decade.
• Wines costing $15 or more will witness an initial duty cut from 150% to 75%, gradually reducing to 25% after ten years.
• However, certain products such as gold (which constitutes 80% of merchandise imports from EFTA countries), dairy products, soya, coal, and certain sensitive agricultural items have been excluded from India's tariff concession list.
• Regarding India's exports to EFTA countries, there will be minimal impact as most products already face low or zero tariffs due to the Most Favored Nation (MFN) status enjoyed by these nations in EFTA countries.
• For instance, the majority of India's $1.3 billion merchandise exports to Switzerland are industrial products with zero tariffs, while agricultural exports form a small fraction with limited gains due to their low trade values.

• In the services sector, both India and EFTA members have committed to liberalization across various sectors, offering significant benefits. Notable advantages for India include commitments from Norway to grant access to yoga instructors and traditional medicine practitioners from India, provided they comply with Norway's legal framework.
• Additionally, Norway and Switzerland have committed to allowing highly skilled Indian professionals to move as intra-corporate transferees for four and three years, respectively, contingent upon obtaining work permits.
• However, the practicalities of service delivery are often influenced by regulatory requirements in each country.
• A dedicated annex in the TEPA outlines a framework to simplify the recognition of qualifications for service suppliers by streamlining various requirements. This includes the possibility of achieving equivalence by supplementing academic or training requirements instead of repeating the entire professional degree.
• Separate annexes for financial services and telecom services also establish disciplines aimed at facilitating the provision of such services.
• A notable departure from previous FTAs involving India is that benefits under the trade in services chapter will extend to any corporate entity incorporated in an EFTA member country, even if its actual operations are in another WTO member nation, including those without FTAs with India.
• This provision could potentially allow free riders to benefit from TEPA. To mitigate this risk, the investment chapter mandates that benefits are restricted to entities with substantial business activities within EFTA countries. However, services related to commercial presence will be governed by the services chapter.

• The Trade and Sustainable Development (TSD) chapter within TEPA is a significant milestone for India as it includes commitments on environmental and labor aspects, marking a departure from India's previous skepticism regarding linking these issues in FTAs due to concerns about potential protectionist measures.
• The TSD chapter incorporates various multilateral environmental agreements and labor conventions, emphasizing a balanced approach between rights and obligations.
• For instance, the TSD chapter references international agreements such as the UN Framework Convention on Climate Change and the Paris Agreement, which acknowledge varying obligations for developed and developing nations concerning environmental responsibilities.
• Similarly, labor conventions under the International Labour Organization (ILO) follow a tripartite framework involving governments, employers' organizations, and employee representatives.
• While the TSD chapter does not fall under dispute resolution mechanisms, India must ensure that any scrutiny regarding its implementation of environmental and labor obligations, as mandated by the TSD chapter, respects the delicate balance inherent in multilateral environmental and labor conventions.
• This approach is crucial to maintain the integrity of the agreements and promote sustainable development practices within the framework of the TEPA.

• The TEPA addresses concerns raised by pharmaceutical and high technology multinational corporations (MNCs) from EFTA countries regarding the protection of intellectual property rights (IPR) beyond the WTO's Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement.
• Notably, the TEPA acknowledges certain demands from these entities. For instance, India's Patents Act currently allows for pre-grant opposition of a patent application.
• The TEPA's IPR Annex stipulates a swift rejection of "prima facie unfounded" oppositions, potentially subjecting India's internal regulatory processes to external scrutiny regarding meeting this standard.
• Similarly, Indian law mandates the filing of an annual statement on the working of a patent.
• Under the TEPA, this reporting frequency is extended to every three years, with annual statements required only in specific cases.
• This change raises concerns that the existing statutory requirement in Indian law may need to be reconsidered to accommodate these case-specific scenarios.
• It's worth noting that amendments to India's patent rules were notified shortly after the signing of the TEPA, highlighting a potential misalignment between FTA commitments and subsequent legal changes.
• In essence, the TEPA delves into unfamiliar territory regarding IPR protection, and its impact will become clearer through its implementation over time.
• Close monitoring of how these provisions are applied and their effects on India's regulatory framework will be essential to assess the agreement's overall impact accurately.