Switzerland's MFN Status Suspension Leaves India Ties Untouched

Switzerland's suspension of India's Most Favoured Nation (MFN) status reportedly will not harm bilateral relations, says the Swiss Embassy in New Delhi. Despite changes in tax protocols and MFN interpretations, both countries maintain strong ties and continue to promote investments and trade agreements.

The Swiss Embassy in New Delhi asserts that Switzerland's decision to suspend India's Most Favoured Nation (MFN) status will not affect bilateral relations between the two nations. This declaration comes amidst questions about the potential impacts on Swiss investments in India.

The embassy clarified that the suspension aligns Switzerland's interpretation of the MFN clause to match India's stance, as confirmed by the Indian Supreme Court. Crucially, this adjustment does not influence the comprehensive free trade agreement or investments from Switzerland to India.

Regarding the European Free Trade Association (EFTA), the embassy explained that effective January 1, 2025, Switzerland will impose a residual tax of 10 percent instead of the previous 5 percent, ensuring parity between Swiss and Indian investors. However, this does not alter the validity of the double taxation agreement or other international treaties between the two countries.

The Swiss Embassy further stressed that the bilateral relationship remains resilient. Following the Trade and Economic Partnership Agreement (TEPA) signed in March 2024, the partnership continues to thrive, reaffirming Switzerland's commitment to promoting investments in India. The latest development, therefore, holds no negative implications for Swiss investments or the EFTA-India TEPA.

(With inputs from agencies.)