India-Australia Economic Cooperation and Trade Agreement

In News 

• India and Australia signed an Economic Co-operation and Trade Agreement (ECTA) with an eye on doubling bilateral trade to $50 billion in five years and easing the movement of people, goods and services across borders.  
  • The negotiations for India-Australia ECTA were formally re-launched on 30 September 2021 and concluded on a fast-track basis by the end of March 2022.
  • In February, India signed an FTA with the UAE and is currently working on FTAs with Israel, Canada, UK and the European Union.

Salient Features of India-Australia ECTA

• The India-Australia ECTA is the first trade agreement of India with a developed country after more than a decade.
  • Free Trade Agreement is a pact between two or more nations to reduce barriers to imports and exports among them.
• The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries and covers areas like
  • Trade-in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Customs Procedures, Pharmaceutical products, and Cooperation in other Areas. 
    • Eight subject-specific side letters covering various aspects of bilateral economic cooperation were also concluded as part of the Agreement.
• Commitments: 
  • By Australia: 
    • As regards trade in services, Australia has offered wide-ranging commitments in around 135 sub-sectors and Most Favoured Nation (MFN) in 120 sub-sectors which cover key areas of India’s interest like IT, ITES, Business services, Health, Education, and Audiovisual. Some of the key offers from Australia in the services space include: 
      • Quota for chefs and yoga teachers; Post-study work visa of 2-4 years for Indian students on reciprocal basis; mutual recognition of Professional Services and Other licensed/regulated Occupations; and Work & Holiday visa arrangement for young professionals.
  • By India: 
    • On the other hand, India has offered market access to Australia in around 103 sub-sectors and Most Favoured Nation in 31 sub-sectors from the 11 broad service sectors such as ‘business services’, ‘communication services’, ‘construction and related engineering services, and so on.
  • Both sides have also agreed to a separate Annex on Pharmaceutical products under this agreement, which will enable fast track approval for patented, generic and biosimilar medicines.

Source: ET

Impact or Benefits

• ECTA provides an institutional mechanism to encourage and improve trade between the two countries. 
  • Growing India-Australia economic and commercial relations contribute to the stability and strength of a rapidly diversifying and deepening relationship between the two countries. 
• The ECTA 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. 
    • This includes all the labour-intensive sectors of export interest to India such as Gems and Jewellery, Textiles, leather, footwear, furniture, food, agricultural products, engineering products, medical devices, and Automobiles. 
    • On the other hand, India will be offering preferential access to Australia on over 70% of its tariff lines, including lines of export interest to Australia which are primarily raw materials and intermediaries such as coal, mineral ores and wines etc.
• This agreement will facilitate the exchange of students, professionals, and tourists between us, which will further strengthen these relations.
• It will create new employment opportunities, raise living standards and improve the general welfare of the people of the two countries.
• It will facilitate work visas for two to four years for Indian students in Australia on a ‘reciprocal basis’ and allow Indian chefs and yoga professionals to work Down Under.
• The India-Australia ECTA will further cement the already deep, close and strategic relations between the two countries and will significantly enhance bilateral trade in goods and services, create new employment opportunities, raise living standards, and improve the general welfare of the peoples of the two countries.

Source:TH