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Post at: May 16 2022

India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA)

Why in news?

  • On 2nd April 2022, India signed a historic trade agreement with Australia, the India-Australia Economic Cooperation and Trade Agreement (ECTA).

What is IND-AUS ECTA

  • It covers practically all of India's and Australia's tariff lines, respectively.
  • On 100 percent of India's tariff lines, India will be benefited from Australia's privileged market access.

Objectives

  • With ECTA, current bilateral commerce and services trade of about $ 27.5 billion (2021) is expected to increase to $ 45 to $50 billion in the following five years.

More about agreement

  • The agreement covers a wide spectrum of bilateral economic and commercial interactions between the two countries and includes issues such as:

    a. Trade-in Goods, Rules of Origin.
    b. Trade-in Services.
    c. Technical Barriers to Trade (TBT).
    d. Sanitary and Phytosanitary (SPS) measures.
    e. Dispute Settlement, Movement of Natural Persons.
    f. Telecom, Customs Procedures.
    g. Pharmaceutical products and Cooperation in other Areas.
Status of India’s current trade with Australia

  • Australia is the 17th largest trading partner of India, while India is Australia's 9th largest partner.
  • Bilateral trade in goods and services stood at $27.5 billion in 2021.
  • India's goods exports were worth $6.9 billion and imports aggregated to $15.1 billion in 2021.

Exports

  • Major exports by India to Australia include petroleum products, textiles and apparels, engineering goods, leather, chemicals and gems and jewellery.

Imports

  • Imports mainly include raw materials, coal, minerals and intermediate goods.

Australia's Commitments

  • In terms of services trade, Australia has made broad commitments in roughly 135 sub-sectors, as well as Most Favoured Nation (MFN) status in 120 sub-sectors.
  • Covering major areas of importance to India, such as IT, ITES, Marketing services, Medical, Education, and Audiovisual.  
  • Quotas for chefs and yoga instructors; reciprocal post-study work visas of 2-4 year for Indian students. 
  • Bilateral agreements of Consultancy Services and Other authorised Occupations; and Work & Vacation visa agreement for young professionals are just a few of Australia's important services offers. 

India's Commitments 

  • On the other hand, India has granted market access in 103 sub-sectors and Most Favoured Nation status in 31 sub-sectors from the 11 main service sectors, including "business services," "communication services," "construction and allied engineering services," and so on.
  • Under this agreement, all sides agreed to a distinct Annex on Pharmaceutical Products, which will allow for faster approval of proprietary, generic, and biosimilar medications.

Excluded items

  • Such goods will include milk and other dairy products, toys, sunflowers, seed oil, walnuts, pistachio nuts, platinum, wheat, rice, bajra, apple, sugar, oil cake, gold, silver, chickpeas, jewellery, iron ore and most medical devices.

Conclusion

  • The IndAus ECTA, encompassing trade in goods and services, is a balanced and equitable trade agreement, which will further cement the already deep, close and strategic relations between the two countries and will significantly enhance the bilateral trade in goods and services, create new employment opportunities, raise living standards and improve the general welfare of the peoples of the two countries.


 


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