Free trade agreement with India - huge opportunity for the Swiss tech industry
Zürich (ots)
Swissmem welcomes the finalization of the free trade agreement (FTA) with India, which will significantly enhance the competitive position of the Swiss technology industry in this important growth market, as customs duties of up to 22% will be eliminated. This is particularly true with respect to the industry's competitors from China, the UK, the EU and the USA, which have not yet concluded a similar agreement. The FTA opens up new market opportunities in a country with 1.4 billion inhabitants. It will particularly benefit SMEs which do not have the option to establish local production facilities. In this way, the FTA strengthens Switzerland as a centre of industry and secures jobs. At the same time, it supports the manufacturing hub of India through the export of high-tech products and creates new jobs there.
For the Swiss technology industry (mechanical and electrical engineering industries and related technology-oriented sectors), India is an important sales market. No other major market has shown a comparable growth dynamic in the past three years. The cumulative export volume grew by 60% between 2020 and 2023 (2020: CHF 636 million / 2023: CHF 1,022 million).
Swissmem Director Stefan Brupbacher is delighted: "The free trade agreement with India is a glimmer of hope for export companies in a difficult phase. It brings a specific, long-term improvement to framework conditions for the Swiss technology industry. It also shows that more free trade is possible even in times of increased global bloc formation. That is encouraging."
Current customs duties of 8% to 22%
Today, Swiss exporters to India face significant market entry barriers. Current import duties on goods from the Swiss technology industry range between 8% and 22%. With the FTA now concluded, customs duties will be either completely or gradually eliminated or substantially reduced within the next few years, depending on the product. The degree of coverage for industrial goods is around 95%. The agreement gives Swiss companies an advantage over their competitors from China, the UK, the EU and the USA, all of which have not yet concluded an FTA.
As Martin Hirzel, President of Swissmem, emphasizes: "The free trade agreement with India opens up new market opportunities in particular for SMEs - primarily via exports but in the medium term also by establishing their own production sites. India will also benefit, as the agreement is intended to promote investment by Swiss companies in India. This will create jobs and prosperity in both countries. In addition, thanks to easier imports of technologically cutting-edge machines, systems and electronic devices from Switzerland and direct investment by Swiss tech companies, India can successfully continue along its path to becoming a global manufacturing hub."
Free trade: strengthening Switzerland as a centre of industry
The Swiss technology industry exports almost 80% of its goods and services. It relies heavily on having the most unobstructed access possible to global sales markets. The domestic market is far too small to guarantee the continued existence of the technology companies and their 330,000 jobs in Switzerland. Hence, free trade agreements are crucially important. They allow for a lowering of customs barriers and non-tariff trade barriers, making Swiss exporting companies more competitive in the relevant markets. This opens up new market opportunities and secures jobs in Switzerland for the export industry and its countless suppliers.
At the same time, closer trade relations will lead to the expansion of Swiss companies' local presence. For example, Swiss technology companies already employ more than 550,000 people abroad. India in particular, with its great potential and its enormous market, can count on a strong increase in Swiss investments on the ground with good framework conditions. The free trade agreement thus creates a win-win situation.
The agreement with India constitutes a large and important addition to the network of Swiss free trade agreements. Swissmem will support the federal government in negotiations on possible further FTAs. The next important step is to conclude an agreement with the Mercosur countries. Swissmem hopes that this will happen soon.
Contact:
Noé Blancpain, Leiter Kommunikation und Public Affairs
Tel. +41 44 384 48 65 / Mobile +41 78 748 61 63
E-Mail n.blancpain@swissmem.ch
Philippe Cordonier, Responsable Suisse romande
Tel. +41 21 613 35 85 / Mobile +41 79 644 46 77
E-Mail p.cordonier@swissmem.ch