Indian Watch Enthusiasts Rejoice As Duty Cuts On Swiss Watches Promise Accessibility

THM Desk
14 Mar 2024 |
clock icon3 min read
like image
comment icon image
like image
SUMMARIZEarrow down

Switzerland is renowned for its highly innovative economy, consistently ranking at the top of the Global Innovation Index. The bilateral trade between India and Switzerland stood at $17.14 billion in the previous fiscal year, with India's exports valued at $1.34 billion and imports at $15.79 billion. This resulted in a significant trade deficit of $14.45 billion for India in 2022-23.

India's primary imports from Switzerland include gold ($12.6 billion), machinery ($409 million), pharmaceuticals ($309 million), coking and steam coal ($380 million), optical instruments and orthopedic appliances ($296 million), watches ($211.4 million), soybean oil ($202 million), and chocolates ($7 million). From April 2000 to December 2023, India received around $10 billion in foreign direct investments (FDI) from Switzerland, making it the 12th largest investor in the country.

India's watch aficionados are in for a treat as the country has agreed to a significant duty reduction on Swiss watches as part of the recently signed Trade and Economic Partnership Agreement (TEPA) with the European Free Trade Association (EFTA). This move is set to make world-famous Swiss timepieces more accessible to Indian watch enthusiasts.

The Fine Print of the Deal
Under the terms of the TEPA, India will gradually phase out the existing 20% import duty on Swiss wrist and pocket watches over a seven-year period. The duty will be reduced in equal instalments until it reaches zero, effectively eliminating the tariff barrier on these coveted timepieces.

A Win for Indian Watch Enthusiasts
The duty reduction is a significant victory for Indian watch enthusiasts who have long desired easier access to high-quality Swiss watches. Previously, the 20% import duty made these luxury watches prohibitively expensive for many consumers, limiting their reach to only the most affluent segments of society.

With the gradual elimination of duties, Swiss watch brands can offer their products at more competitive prices in the Indian market. This development is expected to fuel the growth of the luxury watch segment in India, catering to the growing appetite for premium timepieces among the country's burgeoning middle class.

Swiss Watch Industry Celebrates
The Swiss watch industry, renowned for its precision engineering and craftsmanship, has welcomed the duty reduction as a positive step towards increasing its presence in the vast Indian market. Major Swiss watch brands, such as Rolex, Omega, Cartier, and Patek Philippe, are likely to benefit from the increased affordability and accessibility of their products in India.

Enhancing Bilateral Trade Relations
The duty reduction on Swiss watches is part of a broader trade agreement between India and the EFTA nations, aimed at strengthening economic ties and facilitating trade flows. The TEPA covers a wide range of sectors, including goods, services, investments, and intellectual property rights.

With the ratification process underway, the agreement is expected to come into force soon, paving the way for enhanced bilateral trade between India and the EFTA countries, particularly Switzerland, India's largest EFTA trading partner.

Fostering a Watch Culture
The increased availability of Swiss watches at more affordable prices is anticipated to foster a burgeoning watch culture in India. Watch enthusiasts and collectors, who previously had limited access to these luxury timepieces, can now indulge in their passion more readily. As Swiss watch brands establish a stronger presence in the Indian market, they are likely to invest in brand awareness campaigns, educational initiatives, and customer experiences. This, in turn, could contribute to the growth of the Indian watch industry, inspiring local manufacturers to raise their standards and innovate.

The duty reduction on Swiss watches under the TEPA is a win-win situation for both India and Switzerland. Indian watch enthusiasts can look forward to a wider range of affordable luxury timepieces, while Swiss watch brands gain access to a vast and growing market.