India-Oz trade pact in force from today : The Tribune India

Tribune News Service

Sandeep Dikshit

New Delhi, December 28

India’s first deal with a developed economy in a decade, the Australia India Economic Cooperation and Trade Agreement (AI-ECTA), will come into effect from Thursday.

As a result, bilateral trade is expected to cross $45-50 billion in five years from the existing $31 billion. It will help in providing duty-free access to the Australian market for over 6,000 broad sectors, including textiles, leather, furniture, jewellery and machinery.

Duty-free access

• Bilateral trade may cross $45-50 bn in five years from existing $31 bn
• Will provide duty-free access to the Australian market for 6,000 broad sectors

AI-ECTA is an ‘early harvest’ agreement before a full Comprehensive Economic Cooperation Agreement (CECA) to pursue future liberalisation, market access and investment opportunities. On the other hand, Australians expect their exporters, businesses, workers and consumers to reap the opportunities and benefits of more open trade with India. They will also hope to leverage Australia’s global strengths in food, energy, mining, renewables, biotechnology and advanced manufacturing with a “like-minded dependable” partner.

It remains to be seen whether the free trade agreement (FTA) will address the trade deficit because Indian exports to Australia are half of what Australia exports to India. But some of the increase in Australian exports will be in the much-required critical minerals which will be a vital input for made-in-India electronic devices and electric vehicles besides the defence and space sectors.

“Australia’s goal is to lift India into its top three export markets by 2035 and make India the third-largest destination in Asia for outward Australian investment,” said Natasha Jha Bhaskar, an analyst in Australia.

PM Modi and his Australian counterpart had signed the interim free trade agreement on April 2 this year.