India, Australia Push Forward on CECA Talks

Syllabus: GS3/Economy/GS2/IR

Context

• India and Australia are in talks for a Comprehensive Economic Cooperation Agreement (CECA), after already having signed the Economic Cooperation and Trade Agreement (ECTA) in 2022.

About

• The talks focused on strengthening trade ties to achieve the countries’ shared goal of $100 billion in bilateral trade by 2030.
• The ECTA, which came into effect in 2022, has led to about $30 billion worth of Australian exports entering India tariff-free, with Australians saving around $225 million on goods from India.
• India is one of Australia’s largest trading partners, with two-way trade in goods valued at over $6.7 billion in 2023-24.
  • Bilateral trade between both sides, including goods and services, stood close to $50 billion at the end of calendar year 2023.

About CECA

• It is a free-trade agreement between two countries that strengthens their bilateral trade.
• Australia and India first embarked on negotiations for a CECA in 2011.
• Talks were suspended in 2016. In 2021, the two countries formally revived the CECA talks.
• Both countries are looking to expand their trade ties under CECA, to cover sectors like goods, services, rules of origin, government procurement, digital trade, and agri-technology.
  • It also aims to unlock the potential of sectors such as clean energy, agribusiness, education, skills development, and tourism.

Key Objectives:

• Trade Liberalization: Reduce tariffs and non-tariff barriers to promote bilateral trade.
• Investment Facilitation: Encourage mutual investments and provide a framework for better investment protection.
• Service Sector Expansion: Enhance cooperation in services, including education, healthcare, and professional services.
• Technological Collaboration: Foster innovation and technology exchange, especially in sectors like renewable energy and digital economy.

Significance:

• Economic Growth: Boost in GDP growth for both nations through increased trade volumes.
• Job Creation: Expansion of employment opportunities in various sectors.
• Market Access: Providing Australian businesses better access to the Indian market and vice versa.

Way Ahead

• The relationship between Australia and India has developed rapidly in recent years, particularly under the impetus of India’s far-reaching process of economic reform and the resulting rapid globalization of the Indian economy. 
• Both countries have grown in strength and importance and made rapid strides in all areas – trade, energy and mining, science & technology, information technology, education, and defence. 
• The year 2022-23 saw increasing depth and breadth of engagements including establishing new mechanisms for cooperation. 
• In the coming years, the overall relationship between India and Australia will continue to grow and has the potential to assume greater prominence.

Source: TH