The ratification of the India-Australia Economic Cooperation and Trade Agreement (ECTA) by the Australian parliament on Tuesday demonstrates India’s skill in trade negotiations. The deal sailed smoothly through the Australian parliament, despite the fact that it was negotiated when the Liberal Party was in power and signed on April 2, 2022, and Labour came to power in May.
Prime Minister Narendra Modi and his Australian counterpart Prime Minister Anthony Albanese and Commerce Minister, Piyush Goyal and his counterpart, Trade, Tourism and Investment Minister of Australia, Don Farrell need to be complemented for striking the first trade deal with a developed country in a decade. On the one hand, it provides an opportunity for Australian exporters to tap the vast Indian market of 1.4 billion consumers, on the other, it provides an opportunity for Indian exporters to market their value-added products.
“The trade deal will boost exports of pharmaceuticals, India’s second-largest export after petroleum products, to Australia, as medicaments that have already been approved in the US and the UK will get expeditious regulatory approval from Australian authorities.”
Considerable preparation and hard work had gone into finalising the negotiating agenda. Indian negotiators must be complimented for managing to get exclusions for the most sensitive sectors, and dairy and agriculture. These provide employment in rural areas to about 50-55 per cent of its population with small landholdings and 1-2 cattle per farmer. This is in sharp contrast to Australian agriculture and dairying. This bone of contention had stood in the way of a free trade deal.
The Ind-Aus ECTA will lead to duty elimination on 100 per cent tariff lines with no restrictions and benefit India’s labour-intensive exports such as textiles and apparel, agriculture and fish products, leather, footwear and furniture, several engineering products, jewellery, select pharmaceutical and medical devices, furniture and sports goods. These now fetch 4-5 per cent import duty in the Australian market. The agreement would provide duty-free access to over 6,000 broad categories of Indian products in the Australian market.
The trade deal will prove to be a milestone in India-Australia relations that will not only increase mutual cooperation, but also significantly contribute to boosting economic growth and the strategic partnership between the two countries.
