As of December 29, the free trade agreement between India and Australia will be in effect, helping to roughly double the bilateral trade to USD 45–50 billion in around five years.
The Australian Minister for Trade and Tourism, Don Farrell, said in a statement on Wednesday, “The (Anthony) Albanese government welcomes confirmation today that the Indian Government has completed its domestic requirements to enable implementation of the Australia-India Economic Cooperation and Trade Agreement (ECTA).
It stated that starting on December 29, 2022, “this trade agreement will bring additional market access opportunities for Australian enterprises and consumers.”
“India and Australia strengthen their long-standing alliance. The Economic Cooperation and Trade Agreement, developed with the help of the leaders of both nations, is effective as of December 29, 2022. For our businesses and employees, it’s the beginning of a brand-new era, Goyal wrote in a tweet.
The agreement, which was signed on April 2, would give Indian exporters duty-free access to the Australian market for over 6,000 different industries, including textiles, leather, furniture, jewellery, and machinery.
Textiles and clothes, a few agricultural and fish products, leather goods, furniture, sporting goods, jewellery, machinery, and electrical items are just a few labor-intensive industries that would greatly benefit.
According to the agreement, Australia will grant zero-duty access to India starting on day one for roughly 96.4% of exports (by value). This applies to a wide range of goods that are now subject to a 4%–5% customs charge in Australia.
In 2021–2022, India’s exports of goods to Australia totaled USD 8.3 billion, while its imports totaled USD 16.75 billion.
According to the announcement, excessive tariffs on another 5% of the commodities will gradually be reduced starting on December 29, and duties on 85% of Australia’s exports to India would be erased.
The ECTA will save Australian exporters about USD 2 billion in tariffs annually, while consumers and businesses will save about USD 500 million in tariffs on imports of completed goods and inputs to “our manufacturing sector,” the statement continued.
According to the statement, Australia’s exporters of essential minerals, medicines, cosmetics, lentils, seafood, sheepmeat, horticulture, and wine will now have access to markets thanks to India’s commitment to lowering tariffs under the terms of the deal.
The agreement maintains chances for Indian students graduating in Australia to engage in post-study work, with a bonus year of stay for high-performing STEM (science, technology, engineering, or mathematics) graduates. ECTA will further support tourist and workforce requirements in regional Australia by making 1,000 work and holiday programme seats accessible to young Indians.
Further, it stated that access to all or portions of more than 85 Indian service sectors and subsectors will benefit Australian service providers. Australian suppliers in 31 different industries and subindustries will be treated with the same level of respect that India accords to other potential free trade partners.