In this article, we will discuss India-Australia ECTA. So, let’s get started.
- It covers almost all the tariff lines dealt in by India and Australia respectively.
- India will benefit from preferential market access provided by Australia on 100% of its tariff lines.
- India will be offering preferential access to Australia on over 70% of its tariff lines.
- Under the agreement, Indian graduates from STEM (Science, Technology, Engineering and Mathematics) will be granted extended post-study work visas.
- It will provide zero-duty access to 96% of India’s exports to Australia and will give about 85% of Australia’s exports zero-duty access to the Indian market
- It will boost bilateral trade in goods and services to USD 45-50 billion over five years, up from around USD 27 billion, and generate over one million jobs in India, according to a government estimate.
- Enhanced Exports: Currently, Indian exports face a tariff disadvantage of 4-5% in many labour-intensive sectors vis-à-vis competitors in the Australian market such as China, Thailand, Vietnam, South Korea, Japan, Indonesia and Malaysia.
- Removing these barriers under the ECTA can enhance India’s merchandise exports significantly.
- Cheaper Raw Materials: Australian exports to India are more concentrated in raw materials and intermediate products. Due to zero-duty access to 85% of Australian products, many industries in India will get cheaper raw materials and thus become more competitive, particularly in sectors like steel, aluminium, power, engineering and so on.
- Change in Perceptions for India: The recent trade agreement will also assist in changing perceptions in the developed world which has always typecast India as ‘protectionist’ and address scepticism around India’s openness to do business with the world.
- Stronger Indo-Pacific: Strong Australia India economic ties will also pave the way for a stronger Indo-Pacific economic architecture, that’s not just based on flows of physical goods, money and people, but on the basis of building capacity led connections, complementarities, sustainable commitments and mutual dependence across countries and sub-regions.