Context: The India-Australia Economic Cooperation and Trade Agreement (ECTA) has been beneficial for India. The exports of Indian farm products and industrial goods such as iron and steel products, showed a marked increase.
India-Australia Economic Cooperation and Trade Agreement (ECTA):
- Australia is an important strategic partner of India. They are also part of the four nation QUAD, Trilateral Supply Chain Initiative and the Indo-Pacific Economic Forum (IPEF).
- The Australia-India ECTA entered into force in the year 2022.
- It provides an institutional mechanism to encourage and improve trade between the two countries and covers almost all the tariff lines dealt by India and Australia.
- Provisions:
- Preferential market access for goods:
- India is benefitting from preferential market access provided by Australia on 100% of its tariff lines, including all the labour-intensive sectors of export such as Gems and Jewellery, Textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices and Automobiles.
- India is 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.
- Services:
- Australia has offered wide-ranging commitments in around 135 sub-sectors and Most Favoured Nation (MFN) status in 120 sub-sectors covering key areas of interest to India.
- India has offered market access to Australia in around 103 sub-sectors and Most Favoured Nation status in 31 sub-sectors from the 11 broad service sectors such as ‘business services’, ‘communication services’, ‘construction and related engineering services.’
- Separate Annex on Pharmaceutical products: This agreement will enable fast-track approval for patented, generic and biosimilar medicines.
- Employment generation:
- An additional 10 lakh jobs would be created in India under ECTA.
- Indian Yoga teachers and chefs are set to gain the annual visa quota.
- Over 1 lakh Indian students would benefit from a post-study work visa (for 18 months to 4 years) under the ECTA.
- Preferential market access for goods:
- Increase in exports:
- Indian exports of iron and steel products were up 16 per cent at $322 million, apparel exports increased 6 per cent to $342 million and exports of jewellery increased 6 per cent to $169 million.
- Indian exports of agriculture also increased 15 per cent.
India and Australia are now negotiating to sign a full-fledged Comprehensive Economic Cooperation Agreement (CECA).
- The proposed CECA is expected to cover goods (some of the remaining ones that are out of CEPA), services, digital trade, government procurement and Rules of Origin (ROO)-Product Specific Rules Schedule.
Conclusion:
India-Australia bilateral trade, currently valued at about $30 billion per annum, has the potential of touching $100 billion over the next few years with the increased cooperation between the two sides and as India is aspiring to be at the centre of the supply chains of the future, a comprehensive partnership with Australia will assist it attaining its ambitions.