India Australia Free Trade Agreement (FTA)

Table of Contents

India Australia Free Trade Agreement UPSC

India Australia Free Trade Agreement 2022: India exported goods worth $8.3 billion to Australia in 2021-22.

India Australia Free Trade Agreement Benefit: India’s Imports from Australia, on the other hand, stood at $16.75 billion during the period.

India and Australia in April 2022, signed an Economic Cooperation and Trade Agreement (IndAus ECTA).

It set to provide zero-duty access to 96 per cent of India’s exports to Australia including shipments from key sectors such as engineering goods, gems and jewellery, textiles, apparel and leather.

It is expected to boost bilateral trade in goods and services to $45-50 billion over five years, up from around $27 billion, and generate over one million jobs in India.

Read about: Slow Deposit Growth

India Australia Free Trade Agreement Benefits for Australia

India is one of Australia’s most important trading partners, currently the seventh largest.
FTA will secure Australia’s foothold in the world’s fastest growing major economy and enable Australian businesses to unlock or expand their operations in a market of nearly one and a half billion consumers.
It is crucial for Australia to diversify its exports from the troubled Chinese market to India and to forge new bilateral trade relations.
85 per cent of Australian goods exports by value to India will enter without tariffs and an additional 5 per cent will have tariffs eliminated over periods not exceeding 10 years.
- This is commercially significant for up to $14.8 billion worth of Australian merchandise trade destined for the Indian market each year.
It will provide increased certainty for Australian service suppliers already doing business in India by binding existing market access.

India-Australia-Free-Trade-Agreement-notes

India Australia Free Trade Agreement (FTA) Advantages for India

IT sector biggest gainer: IT sector will be the biggest beneficiaries of the India-Australia FTA as services play a crucial role in such trade pacts.
Visa for chefs, yoga instructors: In a first, the India-Australia trade pact will offer visas to Indian chefs and yoga instructors as well.
Work opportunities for students: There is a commitment that every child who goes from India to study in Australia will get an opportunity to work there, depending on the level of education.
Win for India: Cheaper raw material imports, intermediate goods will help India become more competitive in other markets.
- It will help Indian consumers get goods and services at competitive prices and will help our industries open job opportunities.
Boost for pharma: The FTA will provide a big boost to the pharmaceutical industry in India. Medicines which have gone through rigorous approval process by USA & UK will now have fast tracked mechanism to get approval in the Australian Regulatory system.
Opportunities across sectors: It opens up significant new opportunities across sectors for Indian businesses.
- India’s textiles and gem and jewellery sectors have been keenly waiting for the agreement to be able to sell to high income earners in Australia.
- It will provide duty-free access to the Australian market for over 6,000 broad sectors of India, including textiles, leather, furniture, jewellery and machinery.
- Under the pact, Australia is offering zero-duty access to India for about 96.4 per cent of exports (by value) from day one. This covers many products that currently attract 4-5 per cent customs duty in Australia.

Significance of India Australia FTA Agreement

World over, trade agreements among large groups of nations are becoming harder to negotiate.
World Trade Organization (WTO) has also been struggling to get its 164 members on board for new agreements.
Recession and economic slowdown, worsened by Covid, have been forcing even free trade champions like U.S. to prefer bilateral and regional trade deals over multilateral agreements.

India Australia Free Trade Agreement 2022 Significance in India

Successful trade deals changes India’s reputation as a slow negotiator or deal breaker in bilateral, regional and multilateral trade agreements.
It indicates confidence of Indian industry — both manufacturing and services — about taking on foreign competition.
It shows the importance India is attaching to exports for growing fast and becoming a $5 trillion economy in next five years.