The Australian Parliament on November 21 ratified the Economic Cooperation and Trade Agreement (ECTA) with India, paving the way for implementing the deal as early as January 1, 2023.
Ind-Aus ECTA Key points
- Ind-Aus ECTA which was signed on 2 April 2022, is now ready for ratification for its early implementation, with the Ind-Aus ECTA Bill and the DTAA amendment bill being passed by the Australian Parliament.
- This will be India’s first trade deal with a developed country in more than a decade, after the Comprehensive Economic Partnership Agreement was signed with Japan in 2011.
- Duties on 100 percent tariff lines would be eliminated by Australia under the landmark India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA).
- The ECTA would give a big boost to several sectors of the economy, especially textiles, gems and jewellery and pharmaceuticals.
- The Agreement would also open new opportunities for the service sector in India and would immensely benefit students by offering them an opportunity to work in Australia. Annual Visa quota of 1800 is to be instituted for India Yoga teachers and Chefs.
- ECTA provides for an institutional mechanism to encourage and improve trade between the two countries.
- For the first time, decisions completely based on extensive stakeholder consultations with every industry, Ministries, trade associations etc unlike the previous FTAs was undertaken.
- It is expected that with this agreement, the total bilateral trade will cross US$ 45-50 bn in 5 years from existing US$ 31 bn.
- India’s Merchandise Exports is likely to increase by 10 billion by 2026-27. Moreover, since the labour-intensive sectors will be benefitted, it is expected to create an additional employment of atleast 10 lakhs jobs in India, create ample opportunities for investment, promotion of start-ups.
- Similarly, it would provide enhanced job opportunities for Indians in Australia and increased remittance flows to India.
- Around 96% of Australia’s exports are raw materials and intermediate products which will allow many Indian industries to get cheaper raw materials and make them competitive.
- Investments will help increasing presence of higher value products of advanced technology, thereby promoting vertical Movement in the value chain (Engineering, Electronics, Pharmaceuticals & Medical devices).
- Another major gain is in Pharmaceuticals sector, where Drugs approved in other developed jurisdiction will get fast track approval for patented, generic and biosimilar medicines.
- Australia is an important strategic partner of India and both the democracies are part of the four nation QUAD, Trilateral Supply Chain Initiative and the Indo-Pacific Economic Forum (IPEF).
- The trade relationship facilitated through ECTA will open a new chapter on India-Australia Comprehensive Economic Partnership between two vibrant economies with shared interest and trade complementarities.
- This agreement is the cornerstone of our multi-faceted bilateral relations.
- The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries.
- This will also connect with more than seven lakhs of Australia’s Indian diaspora, second highest taxpaying diaspora, which makes a significant contribution to Australia’s society and economy.
