‘MFN status suspension by Switzerland not to impact EFTA pact with India’

New Delhi: Swiss suspension of the most favoured nation clause in the Double Taxation Avoidance Agreement (DTAA) will not have any impact on the commitments signed in a trade agreement between India and the EFTA bloc, a top government official said on Monday.

The Swiss government has suspended the most favoured nation (MFN), which could potentially impact Swiss investments in India and lead to higher taxes on Indian companies operating in the European nation.

India and the four-nation European Free Trade Association (EFTA) signed the agreement in March. Its members are Iceland, Liechtenstein, Norway, and Switzerland.

Switzerland is the largest trading partner of India, followed by Norway in the bloc.

“On EFTA, there is no impact,” Commerce Secretary Sunil Barthwal told reporters here when asked whether the Swiss decision would impact the $100 billion investment commitment of the EFTA bloc under the trade pact with India.

India and the four-nation European bloc signed a free trade agreement under which New Delhi received an investment commitment of $100 billion in 15 years from the grouping while allowing several products like Swiss watches, chocolates and cut and polished diamonds at lower or zero duties.

The bloc committed an investment of $100 billion — $50 billion within 10 years after the implementation of the agreement and another $50 billion in the next five years — which would facilitate the creation of 1 million direct jobs in India.

This is a first-of-its-kind pledge agreed upon in any of the trade deals signed by India so far.