India has signed a free trade agreement (FTA) with a group of four European countries that are not members of the European Union.
The deal with the European Free Trade Association (EFTA) will see investments in India of $100bn (£77.8bn), the country’s trade minister says.
The EFTA is made up of Norway, Switzerland, Iceland and Liechtenstein.
The announcement comes as the UK and India have been holding negotiations over an FTA for the last two years.
“This landmark pact underlines our commitment to boosting economic progress and creating opportunities for our youth,” Prime Minister Narendra Modi said in a statement.
“The times ahead will bring more prosperity and mutual growth as we strengthen our bonds with EFTA nations,” he added.
The agreement comes after almost 16 years of negotiations. Under this deal, India will lift most import tariffs on industrial goods from the four countries in return for investments over 15 years.
The investments are expected to be made across a range of industries, including pharmaceuticals, machinery and manufacturing.
“The agreement enhances market access and simplifies customs procedures making it easier for Indian and EFTA businesses to expand their operations in the respective markets,” the EFTA said in a statement.
India and the four EFTA nations now need to ratify the agreement before it can take effect, with Switzerland planning to do so by next year.
India is due to hold general elections this year as Mr Modi seeks a record third term in office.
In the last two years, India has signed trade deals with Australia and the United Arab Emirates.
Last week, the UK’s trade minister Kemi Badenoch suggested that it was possible that Britain could sign a free trade deal before India held its elections but said it would be “challenging” .
“I suspect that that is not necessarily going to be the case because I don’t want to use any election as a deadline,” she added.
