Recently, India has garnered a lot of attention for its economic ecosystem. The big economies, first the US and now Australia, have rapidly commenced engaging with India strategically and economically. The Indian economy has a robust foundation, and the outcomes are in front of us.
The deal between India and Australia will be based on the free trade agreement (FTA), known as India-Australia Economic Cooperation and Trade Agreement (ECTA). It came into effect in 2022.
After the first India-Australia summit talks on March 10 on many key issues, Australian PM Albanese stated that both sides are looking at strengthening the ambitious, comprehensive economic cooperation agreement CECA by 2023.
A joint statement also stated that both Prime Ministers focused on accelerating the conclusion of a Migration and Mobility Partnership Arrangement (MMPA) within the next three months. Deepening Developments and Expanding of Indo-Australian FTA
Both sides expressed their adherence to concluding the negotiations early to expand the scope of the existing free trade agreement by the end of 2023. The aim is to push bilateral trade to USD 100 billion from the existing unsatisfied $30 billion in the next five years.
This came up in the backdrop of the meeting of the India-Australia 18th joint ministerial commission with commerce and industry minister Piyush Goyal and his Australian counterpart Don Farrell.
ECTA was the first part for India, and CECA is phase two of this deal. Data shows that in the first month ECTA in action, $2.5 billion of goods entered India tariff-free.
On the deadline to conclude the CECA negotiations, Piyush Goyal said that though anything done with a deadline is always “dangerous” as “you may land up making mistakes”, but “we” must do things fast. According to him, Both sides are firmly resolute in expediting the negotiations.
Last year, the countries signed an interim trade deal, close to a full trade agreement. It has cut tariffs on a range of Australian exports to India, including coal, lentils, lobsters and rare earths.
Citing the example of agricultural commodities, avocados and other pet food from Australia, as well as okra and pomegranate from India, are some goods which perhaps see further reductions in tariffs.
The agreement removed duties on 96 per cent of Indian exports to Australia and 85 per cent of Australian exports to India. India has hailed Australia for taking into account the Indian sensitivities in the agricultural and dairy sectors where small and marginal farmers are involved.
Phase two of the deal has a huge implication that if the goal is achieved, India will become Australia’s second-largest trading partner after China, surpassing the United States and Japan. Both nations have a common desire to detach themselves from the growing Chinese footprint.
India and Australia believe that both economies are complementary in nature. Their objectives do not have a conflict of interest. Both are keen to address their national issues along with innovation. They have concurred on sectors like education, agriculture, critical minerals defence, space technology, and energy systems.
Reportedly, a delegation of 25 CEOs also travelled to India with Prime Minister Anthony Albanese from Australia’s largest companies like Qantas, Commonwealth Bank, and Fortescue Metals, hoping to increase business links.
While Australia has some fine technologies, best of education institutes and sports, India can offer in terms of its talent pool, manufacturing base and startup ecosystem.
Australia is also keen to boost digital cooperation with India. India is one of the youngest nations and leading economies. Indian youth is proactive digitally. It is known as the knowledge economy; having this as the vantage point India has tapped another potential sector to captialise on.
This month has witnessed a rain of favorable and dignified trade offers in India. Countries are wooing and engaging the Indian economy. India is building a parallel pillar of trade and commerce to be an integral and right side of the global supply chain and global economic player.
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