Prime Minister Narendra Modi has rightly described the recent India-Australia Economic Cooperation and Trade Agreement (ECTA) as a ‘watershed moment’ in ties between the two nations.
Observers say the agreement, signed in a virtual ceremony witnessed by Prime Minister Modi and his Australian Scott Morrison on April 2, 2022, is expected to boost bilateral trade to $45-50 billion over five years, up from around $27 billion, and generate over one million jobs in India.
As per this agreement, Australia will give zero duty access to over 96% of Indian exports. India will offer preferential access to Australia on over 70% of its tariff lines on goods imports. India will eliminate tariffs on more than 85% of Australian goods exports, including coal, sheep meat and wool. It will give lower duty access to Australian wines, almonds, lentils, and certain fruits.
The agreement will grant Indian graduates from STEM (Science, Technology, Engineering and Mathematics) extended post-study work visas. It will also allow for faster approval of Indian medicines in Australia.
India and Australia share a long history of relations. They happen to be important democratic members of the Commonwealth of Nations. They share political, economic, security, lingual and sporting ties. In recent years, relations between New Delhi and Canberra have attained new highs.
Today, the two capitals are deeply engaged with each other through the Quadrilateral Security Dialogue and the Supply Chain Resilience Initiative. During the second India-Australia virtual summit (March 21, 2022) between Prime Minister Modi and his Australian counterpart Scott Morrison, the two countries signed deals worth almost A$190 million. The deals included skills package and “green steel” development. Modi and Morrison also agreed on programmes for space cooperation, a Centre for Australia-India Relations, and cultural partnerships.
Pertinently, New Delhi and Canberra have not allowed their differences over the Ukrainian issue to affect their overall ties. In the wake of Russia’s military operation in Ukraine in February-end this year, India has stayed neutral. New Delhi has been friendly to Moscow and Kyiv to reduce tension between the two estranged neighbours. In his recent telephonic calls with Russian President Vladimir Putin, Prime Minister Modi has urged him to resolve the present Moscow-Kyiv friction through dialogue and diplomacy.
In contrast, Australia has joined the United States and close allies to impose financial sanctions on Moscow. In February, Prime Minister Morrison branded the Russian invasion of Ukraine as “unwarranted”, “unprovoked”, and “unacceptable.” Canberra targeted travel bans and financial sanctions, including eight individuals on Russia’s national security council.
According to a report, as part of the new sanctions, Canberra has imposed a 35 per cent tariff on all imports from Russia. The sanctions focus on the prohibition on importing oil, refined petroleum products, natural gas, coal, and other energy resources from Russia. They prohibit the exportation of arms or related material, aluminium ores, alumina, certain categories of oil exploration and oil production materials to Russia. Canberra has also placed restrictions on individuals and entities, including banks.
However, during their March summit, Prime Ministers Modi and Morrison agreed to remain focused on the crucial Indo-Pacific Region. Morrison appreciated New Delhi’s position on the Ukrainian issue.
(The author is a New Delhi-based journalist)