India Australia Free Trade Agreement: A Major step was taken to strengthen the relationship between India and Australia in the form of a free trade agreement as the India-Australia Free Trade Agreement was passed in the Parliament of Australia. Australian Prime Minister Anthony Albanese tweeted on November 22 that our (India-Australia) Free Trade Agreement with India has been passed by Parliament.
The Australia-India Economic Co-operation and Trade Agreement (ECTA) will come into force on 29 December 2022. This was announced by Australia’s High Commissioner to India Barry O’Farrell on Wednesday. Ambassador O’Farrell tweeted, “The date is set! The Australia-India Economic Cooperation and Trade Agreement will come into force on 29 December, providing new market access opportunities for both countries and securing a friendship for decades to come.” It is the dawn of a whole new era for our businesses & people,” said commerce and industry minister Piyush Goyal on Twitter.
Salient Features of the Australia-India Economic Cooperation and Trade Agreement (ECTA)
- In February 2022 India and Australia announced that they are going to sign such an agreement.
- India-Australia ECTA negotiations were formally resumed in September 2021 to be concluded on a fast-track basis by the end of March 2022.
- The India-Australia ECTA is India’s first trade agreement with a developed country after a decade.
- The agreement covers a wide range of bilateral economic and commercial relations between the two friendly countries and covers trade in goods, rules of origin, technical barriers to trade (TBT), sanitary and phytosanitary (SPS) measures, dispute settlement, neutral Covers areas such as cooperation in the movement of persons, telecommunications, customs procedures, pharmaceutical products and other areas.
- Eight subject-specific side letters covering various aspects of bilateral economic cooperation were also signed as part of the agreement.
What is Free Trade Agreement (FTA)?
When any goods are sent or exported from our country to another country, then the government there imposes some tax on those goods or those services which are charged as ‘Import Duty’. This is called ‘tariff’ in technical language, but in a free trade agreement, such a list is prepared between the trading countries in which duty is exempted on those goods or some goods. And if there is such an agreement In which duty is not taken at all, then it is called a ‘free trade agreement’. Recently such a free trade agreement has been signed between India and Australia.
What is the Australia-India Economic Cooperation and Trade Agreement (AI-ECTA)?
The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) was signed by the two countries on April 2, 2022. This free trade agreement eases trade between India and Australia by reducing custom duties, regulatory laws, subsidies and quotas on products under import-export. In June 2020, as part of the Joint Statement on a Comprehensive Strategic Partnership between India and Australia, Prime Ministers Morrison and Modi decided to renegotiate a bilateral Comprehensive Economic Cooperation Agreement (CECA).
India Australia Free Trade Agreement: A new round of talks on FTA which started in September 2021 as compared to the earlier one gave the expected results. As a result, on 2 April 2022, India and Australia signed an Interim Economic Cooperation and Trade Agreement (ECTA). Both countries also reiterated their commitment to conclude a Comprehensive Economic Cooperation Agreement (CECA) by the end of 2022.
Learn India Australia Free Trade Agreement in Points
This agreement covers cooperation in the field of bilateral economic and commercial relations between the two friendly countries and the following areas are also included in this agreement:
- Commodity trade, rules of origin.
- Trade in services.
- Technical Barriers to Trade (TBT).
- Sanitary and Phytosanitary measures.
- Dispute settlement, movement of persons.
- Telecommunications, Customs procedures.
- Cooperation in pharmaceutical products and other areas.
- ECTA provides an institutional mechanism to encourage and improve trade between the two countries.
- The ECTA between India and Australia covers almost all tariff lines dealt with by India and Australia respectively.
- India will benefit from the preferential market access provided by Australia on 100% of its tariff lines.
- It includes all export labor-intensive sectors of India like- gems, jewelry, textiles, leather, footwear, furniture etc.
- India, on the other hand, will offer Australia preferential access on more than 70% of its tariff lines, including interest rates for Australia’s exports, which are mainly raw materials such as coal, mineral ores, and wine and intermediaries.
- Under the agreement, Indian graduates related to STEM (Science, Technology, Engineering and Mathematics) will be given extended work visas after study.
- Australia will launch a scheme to give visas to young Indians who want to work in Australia.
Significance of the AI- ECTA:
- It will provide Australia zero-duty access to 96% of India’s exports, including shipments from key sectors such as engineering goods, gems and jewelry, textiles, apparel and leather.
- According to a government estimate, it will increase bilateral trade in goods and services from about US$27 billion to US$45-50 billion in five years and create over one million jobs in India.
- It would give India zero-duty access to 85% of Australia’s exports, including coal, lamb meat and wool, while also imposing reduced duties on Australian wine, almonds, pulses and some fruit.
What will be the Impact on India-Australia Trade Relations?
India-Australia has close bilateral relations which have undergone transformational changes in recent years and have now evolved in a positive direction into a friendly partnership. The two countries enjoy a special partnership characterized by shared values of pluralism, parliamentary democracy, commonwealth traditions, growing economic cooperation, long-standing people-to-people ties and increasing high-level contacts
India Australia Free Trade Agreement: ECTA is India’s first bilateral trade agreement with a developed country in the last decade. The agreement could eliminate tariffs on a range of items on both sides, along with proactive measures to address non-tariff barriers such as technical barriers to trade (TBT) and sanitary and phytosanitary (SPS) restrictions. Two-way trade between India and Australia has increased from US$ 13.6 billion in 2007 to US$ 24.3 billion in 2020.
■ Also Read: Know All Details about Digital Rupee Launched by India
The latest data from India’s Ministry of Commerce and Industry (released in April 2022) shows a 104.8 per cent increase in Indian exports. Australian imports to India have increased by 99.5 percent on a yearly basis. It seems that the signing of the interim agreement has come at the right time when the pace of trade between the two countries is at a high level. Australia aims to make India one of its top three export markets by 2035 as well as the third largest market in Asia for Australian investment.
What are the areas that could benefit from ECTA?
India’s Commerce Minister Piyush Goyal has said that “India’s manufacturing sector, especially micro, small and medium enterprises, is interested in the Australian market as the agreement deals with automobiles, textiles, footwear and leather products, gems and jewelry- Also offers huge opportunities for Indian exports for toys and plastic products.
■ Also Read: ABG Shipyard Bank Fraud Case: Rishi Agarwal, MD of ABG Shipyard Booked for a Massive Scam
India Australia Free Trade Agreement: ECTA has made significant commitments to cut tariffs. Australia will pave the way for zero duty market access for 96.4 percent value of Indian exports (which is 98 per cent of the tariff lines). India, on the other hand, has committed to market access in Australia by eliminating tariffs on exports of more than 85 products of Australian goods immediately after the commencement of the agreement. Access to Australian products is expected to eventually increase to around 91 per cent over the next 10 years.
What are the challenges?
Although total trade figures between the two countries remain low, the latest available data for 2019 in the World Bank database shows that Australian exports account for 2.21 per cent of total merchandise trade in related items, while India’s share is only 0.92 per cent. Indian manufacturers have so far failed to utilize the ease of trade for goods to their full potential. In such a situation, the possibility of providing Australian raw materials and inputs to Indian producers by India-Australia CECA increases.
■ Download India Australia Free Trade Agreement Pdf
While the extent of ultimate benefits will depend on the future export competitiveness position created by Indian industries, any shortfall in taking advantage of those significant production-related benefits coming out of this FTA will undermine the future positive benefits of this agreement for India.
Soon India will shine & grow with the Power of True spiritual knowledge
The India-Australia Economic Cooperation and Trade Agreement reflects the deepening of the relationship between India and Australia as well as the positive change taking place in India and across the world. After which a prediction of Nostradamus seems to be coming true. He has made Predictions about Jagatguru Tatvdarshi Sant Rampal Ji Maharaj that A Middle-Aged Noble Man Will Bring Golden Age and that Great Chyren Will Be Hindu.
India Australia Free Trade Agreement: Adding to this prediction England’s astrologer, Chiero, had predicted in a book written in 1925 – Only a Saint born in the latter half of the 20th century i.e. 2000 A.D. (after the year 1950) would bring a new civilisation’ in the world, which would spread in the entire world. That one person from India would bring a revolution of knowledge to the whole World. Similarly, According to the foreteller “Mr Vegiletin”, in the latter half of the 20th century, the absence of mutual love, degradation of humanity, a race to collect wealth, loot and unjust politicians etc various disasters would be seen.
But a new civilisation based on peace and brotherhood originating from India breaking the boundaries of country, state and race would give rise to peace and contentment in the entire world. There will be no doubt left in realizing the situation as the above-mentioned foreseen changes have already started happening. Now the only wait is to accept the Saint and His altruism by the entire world.
FAQ regarding Australia-India Economic Cooperation and Trade Agreement
A: Under the pact, Australia is offering zero-duty access to India for about 96.4% of exports (by value) from day one. This covers many products that currently attract 4-5% customs duty in Australia.
A: The pact is expected to come into force from January 2023. The agreement, which was signed on April 2, would provide duty-free access to Indian exporters of over 6,000 broad sectors including textiles, leather, furniture, jewellery and machinery in the Australian market.
A: Bilateral free trade agreements of India are being negotiated with the United Arab Emirates, the United Kingdom, Australia and Canada. The agreement with the UAE was ‘close to finalisation’ while the FTA with Australia was at a ‘very advanced stage.
A. The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA) is a free trade agreement.
India-Australia Economic Cooperation and Trade Agreement (IND-AUS ECTA) between the Government of the Republic of India and the Government of Australia.