Swiss Products to Get Cheaper in India as Customs Duties Phased Out

In a significant move, India is set to phase out customs duties on a range of high-quality Swiss products, including watches, chocolates, biscuits, and clocks, over a period of time. This decision is part of the recently signed Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA), which aims to boost trade and investments between the two regions.

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Lower Prices for Swiss Products

As a result of the TEPA agreement, Indian consumers will soon have access to Swiss products at lower prices. The gradual reduction and eventual elimination of customs duties on these goods will make them more affordable for the Indian market. This is expected to benefit both consumers and businesses in India.

Key Swiss Products

Some of the notable Swiss products that will become cheaper in India include famous watch brands like Rolex, Omega, and Cartier. Additionally, Nestle, a Swiss brand with a significant presence in India's FMCG industry, will also benefit from the reduced tariffs on chocolates and other food products.

Tariff Concessions and Timeline

According to an analysis of the TEPA documents by the Global Trade Research Initiative (GTRI), India has granted tariff concessions to several products imported from Switzerland under the agreement. The timeline for tariff reduction varies, with some products seeing immediate duty elimination, while others will have a phased reduction over 5, 7, or 10 years.

Products with Zero Tariffs

Certain Swiss goods, such as coal (except steam and coking coal), most medicines, and dyes, will have their tariffs reduced to zero upon the implementation of the agreement. Other products, including cod liver oil, fish body oil, tuna, trout, salmon, olive oil, cocoa beans and powder, malt products, corn flakes, instant tea, roasted chicory, most machinery, bicycle parts, clocks, and watches, will also eventually have zero tariffs.

Gradual Tariff Reductions

For items such as smartphones, olives, avocado, apricot, coffee capsules, mate, hop cones, caramel, chocolate products, and medical equipment, the customs duties will be eliminated over a period of ten years. Sugar will see a 50% reduction in tariffs over ten years, while cut and polished diamonds will have a reduction to 2.5% in five years and a 50% duty reduction in ten years.

Wine Concessions

The TEPA agreement also includes concessions on wines imported from Switzerland. Similar to the concessions granted to Australia, wines costing less than USD 5 will not receive any concessions. Wines priced between USD 5 and less than USD 15 will see a gradual reduction in duty from 150% to 50% over ten years. For wines costing USD 15 or more, the initial duty cut will be from 150% to 75%, eventually reducing to 25% after ten years.

India-EFTA Trade

In 2022-23, the two-way trade between India and EFTA stood at USD 18.65 billion, with Switzerland being the largest trading partner, followed by Norway. India's main imports from Switzerland include gold, machinery, pharmaceuticals, coking and steam coal, optical instruments and orthopaedic appliances, watches, soybean oil, and chocolates. Major exports from India to Switzerland include chemicals, gems and jewellery, ships and boats, machinery, certain types of textiles and apparel.

The India-EFTA Trade and Economic Partnership Agreement is a significant step towards enhancing trade and economic cooperation between the two regions. The phasing out of customs duties on Swiss products will provide Indian consumers with greater access to high-quality goods at lower prices. This agreement is expected to further strengthen the economic ties between India and Switzerland, as well as the other EFTA member nations.