The Minister of Commerce and Industry, Piyush Goyal, and Minister for Trade, Tourism and Investment, Government of Australia, Dan Tehan, MP, signed the India-Australia Economic Cooperation and Trade Agreement on Saturday, in a virtual ceremony in presence of Prime Minister Narendra Modi and Prime Minister of Australia, Scott Morrison.
The India-Australia ECTA is the first trade agreement of India with a developed country after more than a decade.
The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries, and covers areas like Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Customs Procedures, Pharmaceutical products, and Cooperation in other Areas.
Eight subject-specific side letters covering various aspects of bilateral economic cooperation were also concluded as part of the Agreement.
The ECTA between India and Australia covers almost all the tariff lines dealt in by India and Australia respectively. India will benefit from preferential market access provided by Australia on 100% of its tariff lines. This includes all the labour-intensive sectors of export interest to India such as Gems and Jewellery, Textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and Automobiles.
On the other hand, India will be offering preferential access to Australia on over 70% of its tariff lines, including lines of export interest to Australia which are primarily raw materials and intermediaries such as coal, mineral ores and wines etc.
As regards trade in services, Australia has offered wide ranging commitments in around 135 sub sectors and Most Favoured Nation (MFN) in 120 sub sectors which cover key areas of India’s interest like IT, ITES, Business services, Health, Education, and Audio visual.
The negotiations for India-Australia ECTA were formally re-launched on 30 September 2021 and concluded on a fast-track basis by the end of March 2022.
Australia is the 17th largest trading partner of India and India is Australia’s 9th largest trading partner.
According to a statement by the Ministry of Commerce & Industry, India-Australia bilateral trade for both merchandise and services is valued at US$ 27.5 billion in 2021. India’s merchandise exports to Australia grew 135% between 2019 and 2021. India’s exports consist primarily of a broad-based basket largely of finished products and were US$ 6.9 billion in 2021. India’s merchandise imports from Australia were US$ 15.1 billion in 2021, consisting largely of raw materials, minerals and intermediate goods.
India and Australia are partners in the trilateral Supply Chain Resilience Initiative (SCRI) arrangement along with Japan which seeks to enhance the resilience of supply chains in the Indo-Pacific Region. Further, India and Australia are also members of the recently formed Quad, also comprising US, and Japan, to further enhance cooperation and develop partnership across several issues of common concerns.
