Body to take up trade pact with EFTA

After the European Union, India is now working on a bilateral agreement with non-EU countries.

As a first step, India and the European Free Trade Association (EFTA), comprising Switzerland, Norway, Liechtenstein and Iceland, today set up a joint study group to explore the possibility of entering into a broad-based trade and investment agreement.

The study would examine all aspects of the existing bilateral economic relationship between India and the EFTA and recommend measures to deepen economic engagement through an expansion of two-way trade and investment flows, an official release said.

"India is emerging as a major manufacturing base for the world economy. The investment potential of EFTA states can be married with India's manufacturing capabilities to create greater economic growth on both sides," Minister for Commerce and Industry Kamal Nath said.

The reasons for exploring a deeper engagement with EFTA are the strong complementarities between the economies on both sides.

Harnessing these complementarities would result in widening and deepening of the trade basket, an official release said. Bilateral trade between India and EFTA in 2005-06 stood at $7.4 billion, comprising exports of $623.11 million and imports of $6.85 billion.

There was growth in bilateral trade of 9.3 per cent in 2005-06, but while India's exports to EFTA shrank by over 3 per cent, imports from EFTA grew by 11 per cent.