India-Australia sign interim trade deal after nearly a decade; comprehensive trade deal likely by year-end



India-Australia on Saturday signed the Economic Cooperation and Trade Agreement (ECTA), an interim trade agreement that would be followed by a comprehensive deal by the end of the year. Trade talks between Delhi and Canberra had resumed in September last year after it began nearly a decade back in 2011.

Speaking at the signing ceremony, Prime Minister Narendra Modi said that both the countries will together contribute to the resilience of the supply chain and stability in the Indo-Pacific region. Meanwhile, Australian Prime Minister Scott Morrison termed the investment under the trade agreement as “single largest” by the Australian government.

Morrison further said that democracies are working together to make the supply chain resilient, adding that this was the first step towards signing the full Comprehensive Economic Partnership Agreement (CEPA) by the end of the year. The Morrison government is due to call a general election in the coming days.

“The current trade between the two countries at around $26 bn could double in the next 5 years as a result of the trade deal. The deal will result in greater cooperation in the field of construction, environment and services. Visas for students are also a part of this agreement,” Piyush Goyal said on Saturday.

Goyal further informed that the deal signed on Saturday could take effect in the next 4-5 months which will see over 95% of Indian goods getting zero duty access on day one. About 70% of Australian goods will get concessional duty access from the first day, he added.

Speaking on the time taken to sign the deal, the Commerce Minister said that although talks had started about 10 years back, they came to a halt after the UPA government decided to enter the Regional Comprehensive Economic Partnership (RCEP). However, after the current NDA government decided not to go ahead with RCEP, talks resumed with Australia in September 2021 for the trade deal, he added.

The Ministry of Commerce and Industry in an official statement said that ECTA between India and Australia covers almost all the tariff lines dealt in by India and Australia.

“Australia has offered wide-ranging commitments in around 135 sub-sectors and Most Favored Nation (MFN) in 120 sub-sectors which cover key areas of India’s interest like IT, ITES, Business services, Health, Education, and Audiovisual.

Some of the keys offered by Australia in the services space include a Quota for chefs and yoga teachers; a Post-study work visa of 2-4 years for Indian students on a reciprocal basis; mutual recognition of Professional Services and Other licensed/regulated Occupations; and Work & Holiday visa arrangement for young professionals,” it added.

Australia is the 17th largest trading partner of India and India is Australia’s 9th largest trading partner. India-Australia bilateral trade for both merchandise and services is valued at $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 the US, and Japan, to further enhance cooperation and develop partnerships across several issues of common concern.

Subscribe to Mint Newsletters

* Enter a valid email

* Thank you for subscribing to our newsletter.

the App to get 14 days of unlimited access to Mint Premium absolutely free!

Source link

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.