The European Free Trade Association (EFTA), which includes Switzerland as a member, has penned a free trade agreement with India, which is set to be approved in 2025.

Switzerland's Economic Minister Guy Parmelin, as well as his EFTA counterparts from Iceland, Liechtenstein and Norway, signed the free trade agreement with India's Minister of Commerce, Piyush Goyal, in New Delhi on Sunday.

Under the agreement, the majority of customs duties will be suspended, Swiss Info reports.

Following 16 years of negotiations, the signing of this agreement between the EFTA member states and India, signifies a significant milestone for Switzerland's commercial policy, according to the country's Federal Department of Economic Affairs, Education and Research.

Switzerland, along with Iceland, Liechtenstein and Norway are the first European partners to ink a free trade agreement with India. 

India's growing middle class brings strong growth potential, according to the Swiss economic ministry, and as it stands, India has extremely high customs duties on the majority of imported products.

However, within the free trade agreement, India will eliminate or partially ease customs duties, either immediately or through transitional phases, on 95.3% of industrial products imported from Switzerland (excluding gold).

In addition, India will also allow Switzerland duty-free access to its market for specific agricultural products following a transitional period of up to 10 years, boosting the competitiveness of Swiss exports to India.

Moreover, in regard to the Swiss pharmaceuticals industry, Switzerland's government said the deal includes "improvements" to intellectual property rights, patent procedures as well as the protection of "Swissness," Bloomberg reports.

"The EFTA trade deal continues to deepen market access for India, with an added clause for incentivising investment," according to Rahul Bajoria, an India economist at Barclays Plc.

Even though the EFTA countries' market size is small, the agreement is a "signal nevertheless that even highly developed economies are seeking trade deals with India," he added.

Switzerland, among the EFTA countries, is India's primary commercial partner, with bilateral trade reaching $17.14 billion during the fiscal year 2022-23, out of a total of $18.66 billion with the entire EFTA group.

Switzerland's parliament must ratify the agreement, a process that will commence promptly, as stated by the government, to ensure approval by 2025 at the latest.