India – Australia Bilateral Trade to Double to USD45 Billion in 5 years
31 December 2022: The implementation of Economic Cooperation and Trade Agreement (ECTA) between India and Australia has potential to double bilateral trade in goods and services to USD 45 billion in five years, said the Confederation of Indian Industry (CII). CII noted that zero-duty access to Australia’s market will be available to India immediately as the ECTA enters into force on 29 December 2022.
“Australia and India are increasingly working together as strategic and economic partners. India Australia ECTA is a ground-breaking agreement that will leverage the industry to capitalize the enormous untapped potential. The agreement is expected to boost investments, enhance market access, create additional job opportunities, and most importantly strengthen the bilateral ties of two important players in Indo-Pacific region” by Sanjay Budhia, Chairman, National Committee on EXIM and Managing Director of Patton International Ltd.
Australia will provide zero-duty access to India for 100% of its tariff lines (98.3% tariff lines from day one and the remaining 1.7% in a phased manner in 5 years). This is expected to lead to USD 10 billion jump in India’s merchandise exports by 2026-27 and would help in creating additional 10 lakh jobs in India and more job opportunities in Australia. Besides providing cheaper raw materials to many sectors including steel and aluminium from Australia, the ECTA would also facilitate increased investments from Australia and will support Indian manufacturing, said CII.
The major boost for India would be in its labour-intensive sectors, which are currently subject to import duty of 4-5 % by Australia, will gain immediate duty-free access, according to CII. The sectors that would gain immediately are textiles and apparel, leather and footwear, furniture, sports goods, jewellery, machinery, railway wagons and select agricultural and marine products. CII noted that substantial gains are expected in pharmaceuticals whereby drugs approved in other developed jurisdiction will get approval in Australia much faster.
