How can the India-EFTA trade pact impact small businesses in India?

The India-EFTA (European Free Trade Association) trade pact aims to boost trade and investment between India and EFTA countries (Switzerland, Norway, Iceland, and Liechtenstein). While large companies are often the main focus, small and medium enterprises (SMEs) in India can also be significantly impacted by such agreements.

• Market Access: SMEs will get easier access to EFTA markets due to reduced tariffs and simplified regulations, allowing them to export products like textiles, gems, and pharmaceuticals more competitively.
• Technology Transfer: The pact may encourage technology sharing and joint ventures, helping Indian SMEs upgrade their processes and products.
• Increased Competition: Lower import duties can bring more foreign goods into India, increasing competition for local SMEs, especially in sectors like dairy, machinery, and specialty goods.
• Compliance Challenges: SMEs may face difficulties in meeting strict quality, safety, and environmental standards required by EFTA countries, which could increase operational costs.
• Investment Opportunities: The agreement may attract investments from EFTA countries into India’s SME sector, leading to better infrastructure, training, and innovation.
• Support for Niche Products: SMEs dealing in unique or traditional Indian products may find new markets and higher demand in EFTA countries due to the trade pact.
• Capacity Building: Provisions for technical assistance and capacity building in the pact can help SMEs improve their competitiveness and adapt to international standards.