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- Recently, Various export promotion councils (EPCs) praised the trade agreements signed by India with the UAE and Australia.
- They said that these agreements will help India in boosting its exports by granting preferential access to those markets for Indian products.
More about the news
- The recent pacts:
- India–UAE Comprehensive Economic Partnership Agreement (CEPA) which became effective from May 2022.
- The India-Australia Economic Cooperation and Trade Agreement (ECTA) will come into force from December 29.
- India is the sixth largest trading partner of Australia.
- India’s bilateral trade in goods and services with Australia rose 106.5% to $25.04 billion so far in 2022 compared to 2021.
- FTA’s and PTA’s
- India has signed 13 free trade agreements (FTAs) and six preferential pacts so far with its trading partners for ensuring greater market access for domestic goods and promoting exports.
- The country has recently signed three such agreements with Mauritius, the UAE and Australia.
- India is also actively engaged in FTA negotiations with some of its trading partners including the UK, European Union and Canada.
- India has signed 13 free trade agreements (FTAs) and six preferential pacts so far with its trading partners for ensuring greater market access for domestic goods and promoting exports.
Significance of the trade agreement with Australia
- Job creation: The trade agreement is expected to create 10 lakh jobs and raise Indian merchandise exports to Australia by $10 billion.
- Cheap imports: the ECTA will also allow zero duty on 100% tariff lines and provide cheaper raw materials to steel and aluminium sectors. The trade pact will also raise the bilateral trade volume to $45-50 billion in five years.
- Supply chain resilience: ECTA will help Australian manufacturers strengthen their supply chain resilience and enhance trade diversification while also connecting the two complementary and stable economies.
- Jewellery exports: ECTA would help double India’s gem and jewellery exports to Australia, from its current $350 million to $800 million in three years.
- Export potential for plastics from India stands at $6 billion to Australia.
- Import duty applicable in Australia had been reduced on all tariff lines for plastic products with immediate effect which would act as a great booster for outbound shipments.
- Zero duty access: India is providing zero-duty access to Australia for 70.3 per cent of its tariff lines.
- India has offered zero duty access on coal, alumina calcined, manganese ore, copper concentrates, bauxite, sheep meat, rock lobster, macadamia nuts, cherries, and wool.
- Australia is offering zero-duty access to India for about 96.4 per cent of exports.
Significance of the trade agreement with UAE
- Boost in exports: The country had benefited from preferential market access provided by the UAE on more than 97% of its tariff lines which account for 99% of Indian exports to the region in value terms.
- Bilateral trade: The CEPA with the UAE is expected to increase the total value of bilateral trade in goods to over $100 billion and in services to more than $15 billion within five years.
- Jewellery trade: Post the India-UAE CEPA, gems and jewellery exports to the region witnessed an overall export growth of 20% to the region.
- Export potential for plastics from India stands at $5 billion to the UAE.
- Import duty applicable in the UAE on 260 plastic products has been reduced from 5% to zero with immediate effect.
Different Types of Economic Engagements:
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Source: TH
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