India and Australia signed the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) on April 2, 2022, which will come into force on December 29, 2022, said Minister of State for Commerce and Industry Anupriya Patel.
In a reply to a question in Parliament, Patel said Indian exports will benefit from preferential zero duty market access in Australia for 100 per cent of its tariff lines, which will benefit India’s labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and automobiles.
On the other hand, India has provided preferential access to Australia on over 70 per cent of its tariff lines, which are primarily raw materials and intermediaries such as coal, mineral ores etc., which are required for our domestic manufacturing industry. Moreover, Australia has also provided additional market access and mobility facility for Indian professionals including chefs and yoga teachers.
India had in April inked a historic trade deal with its business partner Australia to export over 95 per cent of its goods to the island country free of duty. The Australia-India Economic Cooperation and Trade Agreement, called by India as IndAus ECTA signifying unity, was signed in a virtual ceremony on the day by Indian commerce minister Piyush Goyal and Australian trade minister Dan Tehan, in presence of Prime Ministers Narendra Modi and Scott Morrison. This is the first trade agreement India has made with a developed economy after more than a decade.
According to the scope of the deal, the bilateral trade in goods and services for both the countries is expected to rise from the existing $27.5 billion to $45 billion in five years. With the world adopting a source diversification strategy, the IndAus ECTA provides good scope as a sourcing alternative for Australia to procure Indian products. It will also provide new market entry of Indian products and services not currently being exported to the Australia.
Under the IndAus ECTA, Australia is offering zero duty access to 100% tariff lines from India. Under the zero duty agreement, As much as 96.4% value of Indian exports will get zero duty access immediately, which comprises 98 per cent of Tariff Lines) . This means that for these tariff lines, Indian exports will have immediate market access at zero duty from day one of the pact coming into force Exports in following labour-intensive sectors, currently subjected to import duty of 4-5 per cent by Australia, will gain from immediate duty-free access.
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