India has inked a landmark Free Trade Agreement (FTA) with the European Free Trade Association (EFTA), comprising Norway, Switzerland, Iceland, and Liechtenstein. The agreement, signed on Sunday after 16 years of negotiations, is poised to inject $1 billion worth of investments into India, according to the Indian Commerce Minister.

This significant development comes amidst ongoing negotiations between India and the UK for a free trade agreement over the past two years. While talks with the UK continue, India has successfully concluded the agreement with EFTA, marking a milestone in its trade relations with Europe.

Prime Minister Narendra Modi hailed the agreement as historic, emphasizing its role in fostering economic growth and creating opportunities for India's youth. Modi expressed confidence that the pact will further strengthen India's ties with EFTA nations, ushering in prosperity and growth for all parties involved.

Under the terms of the agreement, India will eliminate most import duties on products from the four EFTA countries, paving the way for increased trade. In return, these nations will invest in India across various sectors, including medicine, machinery, and manufacturing, over the next 15 years.

The agreement is expected to streamline customs procedures for Indian businesses and facilitate market expansion for EFTA countries in India, as highlighted by EFTA in a statement. Both parties are currently reviewing the agreement, which must be ratified before it can take effect. Switzerland aims to complete this process by next year.

With national elections looming in India this year, Prime Minister Modi's government continues to prioritize trade agreements. The Modi administration has previously signed FTAs with Australia and the United Arab Emirates, aiming to bolster India's economic ties globally.

While the UK has expressed interest in signing a free trade deal with India before the upcoming elections, UK Trade Secretary Kimmy Badenoch acknowledged the challenges in achieving this timeline.