Australian Parliament approves trade deal with India
Tags: National Economy/Finance
Australian Prime Minister Anthony Albanese on 22 November 2022 announced that the country's Free Trade Agreement with India has been passed by the Australian Parliament.
India and Australia signed an historic trade agreement on 2 April 2022 to give a boost to trade and investment between the two countries. The India-Australia Economic Cooperation and Trade Agreement (“IndAus ECTA”) was signed virtually in the presence of the Indian Prime Minister Narendra Modi and the then Australian Prime Minister Scott Morison .
The agreement was to be implemented after the Parliament of Australia passed it. However a parliamentary election was held in Australia on 21 May 2022 in which Scott Morison lost the election and Anthony Albanese was sworn in as the new Prime Minister of Australia on 24 May 2022.
It is an interim trade deal which will be gradually converted into a Comprehensive Economic Cooperation Agreement (CEPA). This is the second such agreement signed by India with a foreign country after a similar agreement was signed with the United Arab Emirates in March 2022.
Highlights of the trade deal
- More than 95% of roughly 12,000 Indian goods will get duty-free access to the Australian market.
- In the next five years the agreement will be expanded to cover 100% Indian goods.
- About 70% of Australian products will get duty-free and concessional access to the Indian market. This will be increased to cover 85% of goods in 10 years.
- Indian exporters in critical sectors, especially labour-intensive ones like agriculture, textiles & garments and pharmaceuticals will get duty-free access to the Australian market.
- The deal also ensures freer movement of skilled professionals from India.
- India has allowed import of premium Australian wine at a concessional rate.
- India has kept the dairy sector out of the trade deal.
India Australia Trade
- India had a merchandise trade deficit of $7.2 billion with Australia in the first ten months of 2021-22. Its exports were $6.3 billion, while its imports from Australia stood at $13.5 billion.
- The major items imported by India from Australia are coals, pearls, precious stones, woods and its products.
- Major exports by India to Australia include petroleum products, gems and jewellery, textiles and apparels, engineering goods, leather, chemicals.
- Australia is the 17th largest trading partner of India and India is Australia’s 9th largest partner.
- Bilateral trade in goods and services stood at USD 27.5 billion in 2021.
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