Recently, India reached a significant milestone in its trade relations with the conclusion of a trade agreement with a bloc of four European countries — Switzerland, Iceland, Liechtenstein, and Norway. This agreement serves as a potential model for future larger agreements and highlights India’s positive stance towards engaging in multilateral, or ‘mini-lateral,’ trade deals.
Historically, India had not actively pursued trade agreements as part of its policy. However, with changing economic and trade dynamics globally and the ongoing stalemate in World Trade Organisation (WTO) negotiations, India may have reevaluated its approach to trade agreements. The agreement with the European Free Trade Association (EFTA) countries has been under negotiation for over 15 years.
While the EFTA countries may be small individually, as a bloc they are high-income nations and collectively rank as India’s fifth-largest trading partner. This makes the agreement valuable for both sides involved. India’s trade agreement with the EFTA countries signifies its commitment to diversifying and expanding its trade relationships beyond major partners like the European Union, China, the United States, and the United Kingdom.
