Economic Cooperation and Trade Agreement signed by India-Australia
- Posted By
10Pointer
- Categories
World Affairs
- Published
5th Apr, 2022
-
Context
India and Australia signed an Economic Cooperation and Trade Agreement, hailing it as a watershed moment and one of the biggest economic doors there is to open in the world.
- Under this agreement, Australia will be providing duty-free access for over 95 percent of Indian goods like leather, textiles, sports products, and jewellery in its market.
Key-Points
- It is India’s first Free Trade Agreement (FTA) with a large developed country in more than a decade.
|
India inked an FTA with the UAE in February and is actively negotiating FTAs with Israel, Canada, the United Kingdom, and the European Union.
|
- Indian STEM (Science, Technology, Engineering, and Mathematics) graduates will be awarded extended post-study work visas under the deal.
-
- Australia will also establish a programme to provide visas to young Indians who wish to spend their vacations working in the country.
- Zero-duty access: The deal would provide duty-free access in its market for over 6,000 broad sectors of India, including textiles, leather, furniture, jewellery and machinery.
- Around 85% of Australia’s exports, including coal, sheep meat, and wool, will have zero duty access to the Indian market, while Australian wines, almonds, lentils, and select fruits would have lower duty access.
- Under the deal, zero-duty access for Indian goods will be expanded to 100% over the next five years.
The need game
|
Why Australia needs India
|
Why India needs Australia
|
- Australia needs a new friend to buy their export products as its old export friend China, has taken offence to Australia's past actions.
- Australian Prime Minister Scott Morrison will soon be heading towards a national election campaign in Australia.
- 1 in 5 jobs in Australia depends on exports while in regional Australia, the figure is 1 out of 4 jobs.
|
- India needs strong friends (developed nations) who can support its export momentum and help it pile its foreign reserves.
- India also needs to maintain a great export momentum for the coming years.
- This can support more jobs in the international market and is a great opportunity for so many professionals.
|
Impact of the Agreement
- Increase in bilateral trade: The agreement is likely to enable an increase bilateral trade in products and services to $45-50 billion over the next five years, up from roughly $27 billion.
- In FY2021, bilateral goods and services trade between India and Australia was $27.5 billion.
- In FY2022, merchandise exports to Australia grew at a quicker rate than exports to any other country.
- Exports of Indian goods and services to Australia are predicted to hit $20 billion in FY2027 and $35 billion in FY2035, up from around $10.5 billion in FY2021.
