India set to reduce import duties on Swiss watches, chocolates as free trade pact kicks off on Oct 1

EFTA countries, led by Switzerland, have a huge trade surplus over India
| Photo Credit:
MOHAMMED YOUSUF

Swiss watches, chocolates, electronics and bicycles are some of the items that are set to get cheaper for domestic consumers as India starts its phased reduction of import tariffs from October 1 under the free trade pact with the European Free Trade Association (EFTA) countries, sources said. The bloc comprises Switzerland, Iceland, Norway and Liechtenstein.

New Delhi, on its part, will keep a keen eye on promotional measures being adopted by the EFTA governments for ensuring committed investment flows into India, the source added. EFTA countries have promised to facilitate flow of $100 billion worth of private sector investments into India over the next 15 years.

“From October 1, India’s rates of duties have to come down for all products it has given concessions for. And from the EFTA side, the investment commitment date will commence and all binding aspects, including promotions, will kick in,” the source said.

Under the India-EFTA Trade and Economic Partnership Agreement (TEPA) signed on March 10 2024, India offered improved market access to 82.7 per cent of its tariff lines which covers 95.3 per cent of EFTA exports (of which about 80 per cent is gold where duties have not been cut). Substantial market access is set to be provided to wide ranging goods including watches, electronics, chocolates, olive oil, biscuits, industrial goods, bicycles, certain agricultural products, mineral & aerated waters, coffee and pharmaceuticals.

“Most of the duty elimination and reduction on goods from the EFTA countries will happen in a phased manner mostly spread over up to 10 years. The importers are expected to pass on the benefits of the duty reduction to consumers in India accordingly,” the source said.

Dairy excluded

Most dairy products and a large number of agricultural items have been excluded by India from duty cuts.

In the area of goods, gains for Indian exporters will be limited as import tariffs in EFTA countries, especially Switzerland, are already very low. 

India’s entire focus will, therefore, be on the other important element of the TEPA, which entails a commitment of flow of $100 billion investment into India from the four-member European bloc over the next 15 years.

EFTA countries, led by Switzerland, have a huge trade surplus over India. In FY25, India’s imports from EFTA was at $22.4 billion while its exports to the region was at $2 billion.

“It was to correct the goods imbalance that India insisted on the investment commitment. The challenge here was that investments come from the private sector and the government can’t commit on its behalf. So, what is it that they can do? They can become India’s ambassadors to attract investments and nudge their companies to invest. The could also facilitate flow of investments. This is where they can be held accountable and India is prepared to do so,” the source said.

In fact, if the EFTA governments fail to carry out promotional activities as assured, India can withdraw its concessions under the ‘claw-back: provision.

“The joint committee for investments that is being set up will keep a tab on both EFTA commitments on investment promotion and facilitation as well as on whether India is meeting the condition of annual nominal GDP growth of 9.5 per cent rate in dollar terms in the period,” the source said.

Published on September 28, 2025