India may renegotiate DTAA with Switzerland over EFTA trade pact: MEA

India on Friday said its double taxation treaty with Switzerland may require renegotiation in view of its trade pact with the member states of the European Free Trade Association (EFTA).

The remarks by the spokesperson of the Ministry of External Affairs (MEA) came after the Swiss government suspended the most favoured nation status (MFN) clause in the India-Switzerland Double Taxation Avoidance Agreement (DTAA).

"My understanding is that with Switzerland, because of EFTA, the double taxation treaty that we have; it's going to be renegotiated. That is one aspect of it," MEA spokesperson Randhir Jaiswal said.

He was responding to a question on the issue at his weekly media briefing.

India and the EFTA member states of Norway, Switzerland, Iceland and Liechtenstein sealed a free trade deal in March. Under the mega trade deal, the four European countries are looking at making an investment of USD 100 billion in India over the next 15 years.

The trade pact is yet to come into force.

In a statement, the Swiss Finance Department announced suspension of the application of the MFN clause of the protocol to the agreement between the Swiss Confederation and the Republic of India for the avoidance of double taxation with respect to taxes on income.

Switzerland cited a 2023 ruling by the Indian Supreme Court in a case relating to Vevey-headquartered Nestle for its decision to withdraw the MFN status.