Swiss State Secretary for Economic Affairs Helene Budliger Artieda has advocated for a bilateral investment treaty (BIT) with India, following the recent trade and economic partnership agreement (TEPA) between India and the European Free Trade Association (EFTA). The EFTA-India agreement includes a commitment from the EFTA nations to invest $100 billion in India over the next 15 years.
The Push for a Bilateral Investment Treaty
Budliger Artieda emphasized that a BIT with India is highly desired by Swiss companies. Such a treaty would aim to protect and promote investments between the two countries, fostering a more favorable environment for businesses. She expressed confidence that the EFTA nations would meet their investment target in India, emphasizing the seriousness of the Swiss private sector in engaging with the Indian market.
Benefits of the EFTA-India Trade Agreement
The TEPA between India and EFTA, which includes Switzerland, Norway, Iceland, and Liechtenstein, is expected to bring transformative changes that boost economic ties. The agreement is projected to cut tariffs on 92.2% of Indian product categories. Budliger Artieda noted the timeliness of the agreement, suggesting it will act as a "booster" amidst global trade disruptions. She also highlighted the massive interest from Switzerland in investing in India, considering the current global trade situation.
Swiss Presence in India
Currently, over 330 Swiss companies operate in India across various sectors, including engineering, services, precision instruments, chemicals, and pharmaceuticals. Indian companies also have a presence in Switzerland, particularly in IT, pharmaceuticals, and machinery.
Challenges and Concerns
While Switzerland is keen on a BIT, India's existing model treaty has faced criticism from developed nations. These nations view the treaty as limiting the ability of foreign investors to seek remedial action and express concerns about the slow progress of dispute resolution within the Indian system. The model BIT was implemented after India faced setbacks in international arbitration cases. This model is a point of concern for the UK as well, which seeks modifications as part of its ongoing trade deal negotiations with India.
Looking Ahead
In June, Indian Commerce Minister Piyush Goyal visited Switzerland to advance bilateral economic cooperation and operationalize the TEPA. Discussions were held with Federal Councillor Guy Parmelin and State Secretary Budliger to develop a roadmap for the TEPA implementation. Switzerland is also seeking concessions for its financial sector players, including insurance companies. It remains to be seen whether India will be willing to offer concessions to Switzerland and other nations regarding its model BIT. India believes that its large market and strong economic growth make it an attractive destination for overseas investors.
