India and Australia have signed an interim trade deal that allows duty free wine and spirits exports from India to Australia in return for a permission to allow import of Australian wine at a minimum price point of $5 per 750 ml bottle. The deal will allow Indian pharmaceutical manufacturers to fast track medicine approvals in Australia by submitting the regulatory approval data they have used to get marketing permissions in countries like the EU and Canada. The trade deal also includes mutual recognition agreements for several service sectors.
Disclosing the broad contours of the India-Australia Economic Cooperation and Trade Agreement ("IndAus ECTA"), commerce minister Piyush Goyal said that the two countries are working on a more comprehensive trade agreement to be finalised soon.
Earlier, Goyal and his Australian counterpart Dan Tehan signed IndAus ECTA in a virtual ceremony in the presence of prime minister Narendra Modi and Scott Morrison, prime minister of Australia.
PM Modi said that signing of IndAus ECTA in such a short span of time reflects the depth of the mutual confidence between the two countries. Modi underlined the huge potential that exists in the two economies to fulfil the needs of each other and said this agreement will enable the two countries to fully leverage these opportunities. "This is a watershed moment for our bilateral relations," he emphasised. Modi also pointed out that the agreement will help both the countries to increase the resilience of supply chains, and also contribute to the stability of the Indo-Pacific region.
In his statement, commerce minister Goyal said that Ind-Aus ECTA covers the entire gamut of the trade & commercial relations, removing trade barriers & opening a plethora of opportunities in both goods & services. With ECTA, the government expects the present bilateral trade for merchandise & services of $27.5 billion (2021) to reach about $45 to $50 billion in the next five years.
The agreement is expected to offer great potential for Indian exports in sectors like textiles & apparels, leather, hospitality, gems & jewellery, engineering goods & pharmaceuticals, IT, startups etc. It is expected to create new employment opportunities, raise living standards & enhance the overall welfare of the peoples of both the countries. Additional employment generation is expected to be 10 lakhs within the next five years.
In services, Australia has offered 135 sub-sectors to India, while India offered 103 sub-sectors to Australia. Key areas of India's interest like education, IT, business, professional services, health, audio-visual have been committed by Australia under ECTA. Australia will also be providing post-study work visas for students, quota for chefs and yoga instructors and work and holiday visa for young professionals, Goyal said.
He also said that adequate safeguards have been provided to prevent circumvention or diversion of goods from any non-party. There is provision for bilateral safeguard measures to protect against sudden surge in import of goods. A clause has also been introduced for a special review mechanism which provides for compulsory review after 15 years in a time-bound manner.