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India, European EFTA bloc sign $100 billion free trade deal

India and the four-member European trade bloc EFTA, including Norway and Switzerland, signed a $100-billion free trade agreement on Sunday to promote investment and exports, officials said.

Published: 10 March 2024 15:53 CET

India, European EFTA bloc sign $100 billion free trade deal

Photo: AFP/INDIAN PRESS INFORMATION BUREAU (PIB).

The deal will see the European Free Trade Association (EFTA) — made up of non-European Union nations, including Iceland and Liechtenstein — invest $100 billion over 15 years in India, the world’s fifth largest economy, India’s Trade Minister Piyush Goyal said.

“The India-EFTA Trade and Economic Partnership Agreement (TEPA) marks a historic milestone in our growing partnership,” Goyal said after the signing in New Delhi.

The agreement “will pave the path for mutual growth and prosperity” by boosting exports, promoting investment and creating employment, he added.

The deal was signed after several rounds of negotiations spanning 16 years.

Indian Prime Minister Narendra Modi said the trade agreement “symbolises our shared commitment to open, fair and equitable trade”, according to a statement read out at the signing ceremony.

Swiss Economy Minister Guy Parmelin said the deal “will allow us to make better use of our economic potential and create additional opportunities for both India and the EFTA states”.

“EFTA countries gain market access to a major growth market… India, in return, will attract more foreign investment from EFTA, which will ultimately translate into an increase in good jobs”, he added, speaking in New Delhi.

EFTA was established in 1960 to promote free trade and economic integration between its members. In 2021, it was the 10th largest trader in the world in terms of merchandise, and the eighth largest in services.

In recent years, India has signed trade agreements with Australia and the United Arab Emirates.

A long-talked-about trade deal with Britain is also said to be in the final stages.

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What lower inflation in Norway means for you

Inflation is slowing

Norway’s Consumer Price Index, CPI, which measures changes in prices for household goods and services, has slowed yet again.

Between April last year and the same month this year, prices in Norway rose by 3.6 percent. It marks the third time that price increases have been below four percent since the start of 2022.

The figures, released by Norway’s national data agency Statistics Norway, mark the fourth month in a row where the 12 monthly inflation figure has been lower than the yearly figure from the month before. This means prices are rising less rapidly than before.

“Price growth decreased for the fourth month in a row in April. Prices are still higher than they were at the same time last year for most goods and services, but they are generally rising more slowly than before,” Espen Kristiansen at Statistics Norway said.

Food remains one of the biggest contributors to inflation

The price of food and non-alcoholic beverages rose by 3.3 percent from March to April, according to Statistics Norway.

Chocolate, soft drinks, coffee, and citrus foods saw the biggest price increases, which the national data agency called “unusual.”

What wasn’t unusual, however, was the cost of food rising following Easter, when many supermarkets ran offers to compete for customers.

“The rise must be seen in the context of the fact that large offer campaigns in connection with Easter dampened prices in March,” Kristiansen said.

The figures for April show that food prices in Norway have increased by 6.8 percent compared to a year ago.

The rising cost of food and drink in Norway could potentially outgrow wages this year, even if expected pay bumps will outpace forecasted inflation overall.

Economists expected inflation to fall more

Inflation hasn’t eased as much as some experts were expecting. Core inflation, which excludes energy prices and taxes, was measured at 4.4 percent year on year in April. This is above what economists surveyed by the newswire Reuters expected.

Norges Bank, the country’s central bank, raised the policy rate to a 16-year high of 4.5 percent in December. The bank has said that inflation should generally be around two percent, so it has used interest rates to curb price increases.

As inflation isn’t falling much quicker than expected, economists predict that the central bank may wait until December before slashing rates – which for consumers means that loan and mortgage repayments will remain high for the foreseeable future.

“The fall in inflation has not been much greater than Norges Bank has thought. This, therefore, indicates that an interest rate cut may come in December instead of September,” Kjersti Haugland, chief economist at DNB Markets, told public broadcaster NRK.

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