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Swiss Investment in India Flourishing, Bolstered by Trade Deals of $100 bn

Swiss companies are increasingly investing in India due to a $100 billion trade agreement, shifting focus from China. The Trade and Economic Partnership Agreement (TEPA) is set to boost Swiss investments by reducing tariffs and enhancing trade. With India's fast-growing economy and favorable investment climate, companies like ABB and Kuehne+Nagel are expanding operations. TEPA aims to generate jobs and promote $100 billion in investments, fostering mutual benefits. Swiss businesses anticipate growth in India's market, backed by government initiatives and a promising business environment.



The landscape of business investments is undergoing a significant transformation, with Swiss companies like ABB and Kuehne+Nagel increasingly turning their focus towards India. A $100 billion regional trade agreement is poised to further unlock opportunities for businesses that have traditionally leaned towards China.

 

In a strategic move reflecting a broader trend in Europe, companies are seeking to diversify amid the uncertainties stemming from the U.S.-China trade tensions. Compared to China, India's economy is perceived as a faster-growing market, drawing attention from investors worldwide.

 

The Trade and Economic Partnership Agreement (TEPA) inked with the European Free Trade Association, spearheaded by Switzerland, is expected to catalyze Swiss investments in India. Once ratified, TEPA will significantly reduce tariffs on various exports, from chocolates to machinery, fostering a more conducive environment for trade.

 

EFTA's commitment to invest $100 billion in India will not only facilitate easier access to a market of 1.4 billion people but also pave the way for enhanced bilateral trade. Industries such as pharmaceuticals, clothing, and machinery are anticipated to benefit significantly from this agreement, boosting India's export potential.

 

Morten Wierod, CEO of ABB, emphasized the company's burgeoning interest in India, with a notable surge in orders prompting expansions and heightened investments in local infrastructure. The country has swiftly climbed the ranks to become ABB's fifth-largest market, on track to secure its position as the third largest, following the U.S. and China.

 

Despite the burgeoning focus on India, ABB remains steadfast in its commitment to China, a sentiment echoed by other corporate entities interviewed. The impending implementation of TEPA is poised to enhance trade relations and foster mutual growth, although formal parliamentary approval is still pending, with an anticipated effective date in late 2025 or early 2026.

 

The International Monetary Fund (IMF) forecasts robust economic growth for India, outpacing China in the coming years. This trend, coupled with India's increasingly favorable investment climate, has spurred heightened Swiss interest in the Indian market.

 

TEPA's promise to eliminate tariffs on a vast majority of exports will position Swiss companies favorably against their European counterparts, providing a competitive edge in the Indian market. The agreement aims to promote investments worth $100 billion over 15 years, with the objective of generating a million jobs, underscoring the mutual benefits envisioned by both India and EFTA.

 

Guy Parmelin, the business minister, anticipates a positive impact from TEPA, emphasizing the reduction of tariffs and administrative barriers as key drivers of growth. Florin Mueller, from the Swiss Business Hub, anticipates TEPA as a gateway for Swiss companies to explore and invest in India, likening it to a "red carpet" invitation.

 

The burgeoning market in India has already attracted companies like Feintool, who are setting up their first factory in the country to cater to local and international demand. Similarly, Kuehne+Nagel is expanding its operations in India, buoyed by government initiatives like the National Logistics Plan, which is streamlining transport infrastructure and reducing costs.

 

With a positive outlook and a conducive business environment, Swiss companies are optimistic about their ventures in India, foreseeing significant growth opportunities and solidifying their commitment to the market.

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