India to launch EFTA trade pact on Oct 1

In the midst of a tariff battle with the United States, India will formally operationalise its free trade agreement (FTA) with four countries of the European Free Trade Association (EFTA) bloc on October 1.

This will be India's first-ever trade pact with a European grouping, the country's Commerce and Industry Minister, Piyush Goyal, said today.

The FTA with the EFTA countries (Iceland, Liechtenstein, Norway, and Switzerland), which was finalised in March last year, will come into effect from Wednesday, said Indian Union Minister of Commerce and Industry, Shri Piyush Goyal, while addressing the valedictory session of the UP International Trade Show.

He said developed nations are keen to sign FTAs with India, which has already concluded such agreements with the UAE, Australia, and the UK.

India's foreign exchange reserves have reached $700 billion, he pointed out.

India is also in discussions with the US, EU, New Zealand, Oman, Peru, and Chile, while Qatar and Bahrain have also expressed interest in trade deals, Goyal said, adding that the terms of reference with Eurasia have been finalised.

The minister said India has transformed from a "fragile" economy in 2014 to become the world's fourth-largest economy today and claimed it will become the third-largest economy with a $5 trillion size in the next two years.

He said inflation is at 2 percent, the lowest in a decade, while GDP growth stood at 7.8 percent in the last quarter of the current financial year.

He also emphasised that India's banking sector is robust and interest rates have come down.

The US imposition of a 50 percent import tax on products from India, including 25 percent on India's purchase of Russian oil, has sparked a tariff faceoff.

The two countries are also in talks for a bilateral trade deal, but India's refusal to open up its farm and dairy sectors remains a key roadblock to achieving it.