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The free trade agreement (FTA) between India and Australia, came into effect from Thursday, December 29. The much awaited deal between the two countries will bolster trade ties and will help boost bilateral trade in goods and services to cross $70 billion in the next five years, according to economic think tank GTRI.
India’s goods exports to Australia stood at $8.3 billion and imports from the country aggregated to $16.75 billion in 2021-22.
The FTA deal will help both the countries gain from exports and imports.
Here are key things to know about India-Australia Free Trade Agreement
The FTA between the two countries officially known as Economic Cooperation and Trade Agreement (ECTA) between India and Australia provides for an institutional mechanism to encourage and improve trade between the two countries.
The ECTA between India and Australia covers almost all the tariff lines dealt in by India and Australia respectively. India will benefit from preferential market access provided by Australia on 100 per cent of its tariff lines. This includes all the labour-intensive sectors of export interest to India such as gems and jewellery, textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and Automobiles.
On the other hand, India will be offering preferential access to Australia on over 70 per cent of its tariff lines, including lines of export interest to Australia which are primarily raw materials and intermediaries such as coal, mineral ores and wines etc.
Australia has offered wide ranging commitments in around 135 sub sectors and Most Favoured Nation (MFN) in 120 sub sectors which cover key areas of India’s interest like IT, ITES, business services, health, education, and audio visual.
Some of the key offers from Australia in the services space include: Quota for chefs and yoga teachers; Post study work visa of 2-4 years for Indian students on reciprocal basis; mutual recognition of professional services and Other licensed/regulated occupations; and work & holiday visa arrangement for young professionals.
While, India has offered market access to Australia in around 103 sub-sectors and Most Favoured Nation in 31 sub-sectors from the 11 broad service sectors such as ‘business services’, ‘communication services’, ‘construction and related engineering services’, and so on. Both sides have also agreed to a separate Annex on Pharmaceutical products under this agreement, which will enable fast track approval for patented, generic and biosimilar medicines.
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