The India–Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) has completed two years. The agreement has created new possibilities for MSMEs, businesses and employment in both countries, thereby strengthening bilateral relations.
Key Points on Ind-Aus ECTA
- Production and Import Utilization: On completion of two years of the agreement, export utilisation reached 79% and import utilisation reached 84%.
- Goal of Developed Nation: The agreement is in line with India’s vision of becoming a developed nation by 2047.
- Increase in Trade: The agreement strengthened economic and trade cooperation between the two countries.
India–Australia Economic Cooperation and Trade Agreement
Commencement and Objectives
- The agreement came into force from 29 December 2022.
- Provides an institutional mechanism to promote and improve trade.
Key Features
Australia’s Contribution
- Provides priority market access on 100% of tariff lines.
- Benefits India’s labour-intensive export sectors such as textiles, leather and jewellery.
India’s Contribution
- Provides priority access on over 70% of tariff lines.
- This includes raw materials and intermediate goods of interest to Australia, such as coal, mineral ores and wines.
India–Australia Trade Services
Australia’s Commitments
- Provides 135 sub-sectors for India’s service exports.
- Provides best favoured nation (MFN) status in 120 sub-sectors.
India’s Commitments
- Provides access to 103 sub-sectors for Australia’s services.
- Strategic Partnership
- Australia is a key strategic partner for India and is part of the Quad, the Tri-regional Supply Chain Initiative, and the Indo-Pacific Economic Forum (IPEF).
India–Australia Economic Cooperation
Strategic Partnership
- Australia is an important trading and strategic partner of India.
- Both countries are part of the Indo-Pacific Economic Forum (IPEF) and the tri-regional Supply Chain Resilience Initiative (SCRI), which aim to strengthen supply chain resilience in the region.
FDI
- FDI from Australia in January–September 2023 was $307.2 million, up seven times from $42.43 million in the full year of 2022.
- FDI in consulting services was $248 million, up from $0.15 million in 2022.
Trade Status
- In FY23, India was Australia’s 9th largest trading partner, and Australia was India’s 13th largest trading partner.
- Future Trade: Trade between India and Australia is projected to reach $45-50 billion by 2035.