MFN Status Suspension Not To Delay Implementation Of EFTA Trade Pact With India: Switzerland

New Delhi, Dec 23 (PTI) The Swiss decision to suspend the most favoured nation clause in the Double Taxation Avoidance Agreement will not delay the ratification and implementation of the already signed trade agreement between India and the EFTA bloc, Switzerland has said.

The Swiss government has suspended the Most Favoured Nation (MFN) status, which could potentially impact Swiss investments in India and lead to higher taxes on Indian companies operating in the European nation.

India and the four-nation European Free Trade Association (EFTA) signed the pact, officially dubbed as TEPA (Trade and Economic Partnership Agreement), in March. Its members are Iceland, Liechtenstein, Norway, and Switzerland.

The agreement is yet to be implemented.

"No, the decision will not delay the ratification and implementation of EFTA-India TEPA," the Embassy of Switzerland in India has said in a response to PTI queries on the matter.

It also said that this decision does not negatively affect investments from Switzerland to India.

"The current suspension from the Swiss side of the application of the MFN clause under the protocol to the double taxation agreement between Switzerland and India does neither affect trade ties between the two countries nor Swiss investments in India," it added.

India and the four-nation European bloc signed a free trade agreement under which New Delhi received an investment commitment of USD 100 billion in 15 years from the grouping while allowing several products like Swiss watches, chocolates and cut and polished diamonds at lower or zero duties.

The bloc committed an investment of USD 100 billion -- USD 50 billion within 10 years after the implementation of the agreement and another USD 50 billion in the next five years -- which would facilitate the creation of 1 million direct jobs in India. This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far.

In 2023-24, India's imports from Switzerland stood at USD 21.24 billion, in stark contrast to its exports of USD 1.52 billion, leading to a substantial trade deficit of USD 19.72 billion.

India received about USD 10.72 billion in foreign direct investments from Switzerland between April 2000 and September 2024.