The Australian Parliament on Tuesday ratified the India-Australia Economic Cooperation & Trade Agreement (ECTA) signed by both countries in April 2022. The ECTA will come into force 30 days after an exchange of written notifications on completion of domestic processes by both the countries. India has sent the agreement for Presidential Assent.
The operationalisation of Ind-Aus ECTA is expected to increase bilateral trade from the current $31 billion to about $50 billion in the next five years. India’s merchandise exports are expected to increase by $10 billion by 2026-27, the commerce ministry said.
The Indian pharmaceutical industry is considered to be a major gainer as drugs approved in other developed jurisdictions will get faster approval in Australia because of the deal. With the largest number of US FDA approved manufacturing plants outside the US, India is in a strong position to take advantage of this opportunity.
In a statement, Australia said the agreement is a great opportunity for Australian businesses as it will open up new markets to reach around 1.4 billion consumers in the world’s fastest growing major economy.
The current agreement is an early harvest deal as both the countries continue to negotiate for a more comprehensive economic partnership. The deal will allow duty-free access for over 6,000 Indian product segments into Australia in five years. It has inbuilt safeguards for protection against sudden surge in import of goods and carries a clause for review of the agreement after 15 years.
According to the Commerce Ministry, the deal offers great potential for Indian exports in sectors like textiles & apparels, leather, hospitality, gems & jewellery, engineering goods & pharma, IT, Startups etc. Services like education, IT, business, professional services, health will have easier bilateral access.
Meanwhile, speaking at the 3rd edition of ISA Steel Conclave in New Delhi on Tuesday Union Minister of Commerce and Industry, Piyush Goyal said that post agreement with Australia India’s steel exports to Australia will become duty free. He urged industry to make best use of the Agreement and look at capturing new opportunities in Australia. He said that these trading agreements with developed countries will usher in new opportunities for Indian youth and businesses across sectors.