Why in news
Switzerland has suspended the Most Favoured Nation (MFN) clause in the Double Taxation Avoidance Agreement (DTAA) with India.
This could affect Swiss investments in India and potentially increase taxes on Indian companies operating in Switzerland.
Impact on India-Switzerland trade
The suspension of the MFN clause does not delay the ratification or implementation of the EFTA-India TEPA (Trade and Economic Partnership Agreement)
TEPA was signed in March between India and the European Free Trade Association (EFTA), including Iceland, Liechtenstein, Norway, and Switzerland.
The Swiss government confirmed that the decision will not negatively impact trade ties or Swiss investments in India.
Key details about the agreement
The TEPA is a free trade agreement aimed at boosting trade and investments between India and the EFTA countries.
As part of the agreement, India received a commitment of $100 billion in investments from EFTA over 15 years.
It also provides lower or zero duties on various Swiss products like watches, chocolates, and diamonds.
Trade and investment facts
In 2023-24, India’s imports from Switzerland amounted to $21.24 billion, while exports to Switzerland were $1.52 billion, resulting in a trade deficit of $19.72 billion.
Swiss foreign direct investments (FDI) in India between April 2000 and September 2024 totaled $10.72 billion.
COMMENTS