India will have option to withdraw duty concessions if USD 100 bn investment commitment not met by EFTA
India will have the option of temporarily withdrawing customs duty concessions on EFTA country goods under the trade agreement between the two sides, if the four European nation bloc would not fulfil its USD 100 billion investment obligations. Though the investments have to flow in 15 years — USD 50 billion in the first 10 years (counted after implementation of the pact) and another USD 5 billion in next five years, the trade deal also provides for a three-year grace period to the EFTA bloc to meet the obligations, according to the documents accompanying the agreement.
India and four-nation European Free Trade Association (EFTA) bloc signed Trade and Economic Partnership Agreement (TEPA) on March 10 under which New Delhi received a foreign direct investment commitment of USD 100 billion in 15 years from the member countries of the grouping.
The EFTA members are Iceland, Liechtenstein, Norway, and Switzerland.
There is a three-stage government-to-government consultation process prescribed in the document for resolution of differences raised in relation to the obligations.
«If, after the consultation period, India is still of the opinion that the EFTA states have not fulfilled their obligations, India may, after a further grace period of three years, suspend concessions. The suspension of concessions needs to be proportionate and temporary,» according to the agreement documents posted on EFTA website.
It would take around a year for the agreement to come into force.
The investment promotion and cooperation
