Review of tariff cuts to EFTA only after 18 years

INDIA CAN WITHDRAW tariff concessions granted to the European Free Trade Association (EFTA), in case the bloc does not fulfil its $100 billion investment obligation, only after 18 years, and that too after a three-stage consultation process.

- MUKESH JAGOTA

The investments under the Trade and Economic Partnership Agreement (TEPA) have to flow in over 15 years $50 billion in the first 10 years and another $5 billion in the next five. The pact, however, provides for a three-year grace period to EFTA, according to the agreement documents reviewed by FE.

The consultation procedure can be invoked by India if the investment target is not achieved in 15 years, but only after the grace period. Importantly, the suspension of concessions should follow the conclusion of the consultation process. The revocation of duty reliefs also has to be "proportionate and temporary", as per the documents, where "proportionate" is not defined.

The agreement does provide for a specially appointed sub-committee for a regular review of progress on the investment front. The subcommittee will meet every two years and may even invite private sector entities, international economic organisations, non-governmental organisations and other relevant stakeholders to assist.