The Economic Cooperation and Trade Agreement (ECTA) signed between India and Australia would provide immediate market access at zero duty, accounting for 96.4 percent of India’s exports to Australia in value terms, as per PIB statement
Department of Commerce and Industry, Rajesh Agrawal says: “The Department of Commerce has achieved the unique distinction of operationalizing two Trade Agreements this year – India UAE FTA and Ind – Aus ECTA.”
“The coming into force of Ind – Aus ECTA brings together two major economies of the world – India the 5th largest economy and Australia the 14th largest economy. Since the trade between the two countries is hugely complementary, this offers opportunities on both sides and will pave the way for a win-win solution for both India and Australia,” he added.
India imports USD 17 billion from Australia, while it exports USD 10.5 billion to Australia. However, 96 per cent of India’s imports from Australia are raw materials and intermediate goods.
They are highly concentrated in coal (74 per cent of Australia’s exports to India), 71.4 per cent of which is coking coal. India’s exports to Australia, on the other hand, are diverse and dominated by finished goods. According to the statement, India also spends approximately USD 4 billion per year on education for students in Australia.
The agreement will benefit a variety of labour-intensive Indian industries that are currently subject to a 5 per cent import duty by Australia.
The agreement will result in immediate duty-free market access for 98.3 percent of tariff lines, accounting for 96.4 per cent of India’s value-added exports to Australia.
The remaining 1.7 per cent of lines will be reduced to zero duty over a five-year period. According to the statement, Australia offers duty-free access to all of its tariff lines.
Textiles and apparel, agricultural and fish products, leather, footwear, furniture, many engineering products, jewellery, and select pharmaceuticals all have immediate duty-free access. As a result, many industries such as steel, aluminium, clothing, and others will benefit from cheaper raw materials, allowing them to compete.
According to the agreement, both parties have agreed to a separate Annex on Pharmaceutical Products, which will allow for fast-track approval of patented, generic, and biosimilar medicines.
India is providing duty-free access to 90 per cent of Australian products (including coal). Zero duty on 85.33 per cent of products will be offered immediately, while zero duty on 3.67 per cent of products will be offered gradually over 3, 5, 7, and 10 years.
According to the statement, India has offered concessions on tariff lines of export interest to Australia such as coking and thermal coal, wines, agricultural products – seven of which have TRQ (cotton, almonds shelled and in shell, Mandarin, oranges, lentils, pear), metals (aluminium, copper, nickel, iron and steel), and minerals (manganese ore, calcined alumina).
Many sensitive products, including milk and other dairy products, wheat, sugar, iron ore, apple, walnuts, and others, are still on India’s Exclusion list, according to the statement.