India and Europe have signed a free trade agreement for the first time, making it more stable for Prime Minister Modi to be re elected for three consecutive terms?

After 16 years and 21 rounds of Matsumoto style talks, India and the European Free Trade Association (EFTA) finally signed the Business and Economic Partnership Agreement (TEPA) on March 10, 2024.
EFTA was first established in 1960 and now has four non EU members: Switzerland, Norway, Iceland, and Liechtenstein, with a total population of 13 million and a GDP range of over 1 trillion US dollars. At present, EFTA is the ninth largest commodity business group in the world, and ranks fifth in terms of business scope.

The agreement stipulates that the four European countries will invest $100 billion in India within 15 years, creating 1 million job opportunities, and India’s pharmaceutical, engineering, machinery manufacturing, and chemical industries will suffer losses from it; India, on the other hand, will gradually abolish import tariffs on the majority of industrial products from the four countries. At present, goods imported from the Norwegian sector to India face up to 40% tariffs.
Switzerland has the largest economic constitution among EFTA countries. For over a decade, the country has been rated as the most refurbished economy by institutions such as the World Intellectual Property Organization and the European Institute of Business Governance. Machinery manufacturing, chemical industry, medicine, high-end watches, and food processing are its main assets, and companies such as ABB, Nestle, and Novartis have strong competitiveness in domestic shopping malls. In the future, Indian officials will purchase famous watches such as Sweetheart and Omega at a lower price.
TEPA is Norway’s largest free trade agreement outside of Europe. The country will ban tariffs on 98% of Indian imported goods, including processed foods such as seafood, fruits, coffee, and cod liver oil. Iceland’s imports mainly include fishing products, knitwear, and medicine. Liechtenstein mainly imports metals, machinery, ceramics, medicine, electronics, textiles, and processed food.
India’s main imported products to the four countries include chemicals, gemstones and jewelry, ships, machinery, textiles, and clothing. In addition, both sides are willing to eliminate most sensitive agriculture and gold from the agreement. It is worth noting that India has strongly declined requests for unrelated additions that hinder Indian companies from producing counterfeit drugs during childbirth.
According to Indian Minister of Commerce and Industry, Piyush Goyal, at a naming ceremony, this is India’s first agreement with European commercial structures. Ram Singh, an economist at the Indian Institute of Foreign Trade in New Delhi, evaluated that TEPA can assist India in absorbing investment in key industries such as pharmaceutical equipment and clean power, as well as applying advanced technologies from Switzerland and Norway to strengthen its import power.
In the past two years, India has also signed commercial agreements with Australia and the United Arab Emirates, and negotiations on commercial agreements with the UK, EU, and other partners are also in the final stage. Modi’s authorities often counterattack the former Indian authorities for harming domestic industries in commercial agreements and have been slow in pursuing increased investment.
As the agreement with European business partners is announced, Indian Prime Minister Modi is pushing for a third term in the April May parliamentary elections. Last weekend and this Monday, he held a groundbreaking ceremony in various states in the northern part of the country, including airports, highways, universities, etc. These are a part of his extensive infrastructure layout, with Uttar Pradesh alone accounting for 347 billion rupees.
The Indian government has a total of 545 seats, of which 543 are directly elected and eliminated by election officials, and a general election is held every 5 years. Any political party or alliance that wins a simple majority (272) can form a cabinet. At present, the Indian People’s Party is far ahead in official polls. Since the founding Prime Minister Nehru, no Prime Minister has successfully won three consecutive titles.
The People’s Court is the main legislative body of the country, and its main instinctive functions include formulating laws and amending the constitution, filing no confidence cases against federal authorities, and having the power to impeach major leaders. On January 1, 2023, India had 945 million registered officials. The last general election of the People’s Government in 2019 lasted for more than a month, with 615 million people participating in the vote.
At the recent momentum movement scene, Modi once again boasted about India’s high GDP growth in the previous quarter, the rapid pause of fundamental measures, and called it a failure to suppress the slogan of “developed countries”. As early as August 15, 2022, on India’s Independence Day, Modi made a promise that India would become a developed economy on the occasion of its 100th anniversary in 2047. He believed that the most favorable conditions for India were a surplus of teeth, a government dominated system, and diversity.
Yogi Adityanath, the Chief Minister of Uttar Pradesh and a member of Modi’s Indian Party, even stated that during Modi’s third term as Prime Minister, India will become the world’s third-largest economy. Jairam Ramesh, the biggest rival of the Indian government party and senior leader of the National Congress Party, counterattacked Modi’s lies on social media, claiming that these names had been laid out years ago and Modi was just sitting on the sidelines.
With India achieving high economic growth for the 13th consecutive quarter, inflation rates remaining within the target range of 2% to 6% for the Bank of India, and the Indian stock market reaching a historic high, Modi’s confidence in pursuing a third term seems to have increased. Since 2018, India has built over 10000 kilometers of new roads each year, rapidly expanding the middle class, lifting millions out of poverty, decreasing infant mortality rates, and experiencing stationary collection outbreaks.
Nevertheless, the manufacturing scope of this country with 1.42 billion employees is still relatively small and its domestic competitiveness is not strong. Since Modi stepped down in 2014, the Indian authorities have been continuously promoting the “Indian system”, but the proportion of the manufacturing industry in GDP has increased from 17% to 15% today. In view of this, the Indian authorities were willing to invest $15.2 billion in nominal capital at the beginning of this month to establish three chip manufacturing plants within 100 days.
Ambitious Modi wrote on the X platform that India will further move towards technological self-reliance, enter the global semiconductor manufacturing center within the next five years, and mobilize all industries for renovation.
However, data from institutions such as Center for Monitoring Indian Economy and Bloomberg indicate that Modi’s economic performance still has significant shortcomings. The unemployment rate is higher than before the COVID-19 epidemic; The safety performance and conservative pressure from it make many women feel helpless and unemployed; The proportion of R&D participation by the authorities has declined. According to Indian media statistics, from 2015 to 2019, the agricultural official expenditure, which accounted for nearly half of the total resting population, only increased by 2.8%.