Wed, 30 Nov 2022 05:21 PM IST
THE FREE trade agreement between India and Australia, signed in April between the two countries, will come into force from December 29, a move which will help in almost doubling the bilateral commerce to $45-50 billion in around five years.
"The (Anthony) Albanese government welcomes confirmation today that the Indian Government has completed its domestic requirements to enable implementation of the Australia-India Economic Cooperation and Trade Agreement (ECTA)," Australian Minister for Trade and Tourism Don Farrell said in a statement on Wednesday.
India & Australia consolidate their long-standing partnership.— Piyush Goyal (@PiyushGoyal) November 30, 2022
Economic Cooperation & Trade Agreement, realised under the guidance of leaders on both countries, comes into effect from December 29, 2022.
It is the dawn of a whole new era for our businesses & people. 🇮🇳🤝🇦🇺 pic.twitter.com/69YzR0h62G
"India & Australia consolidate their long-standing partnership. Economic Cooperation & Trade Agreement, realised under the guidance of leaders of both countries, comes into effect from December 29, 2022. It is the dawn of a whole new era for our businesses & people," Goyal said in a tweet.
The agreement would provide Indian exporters duty-free access to the Australian market. This will cover 6,000 broad sectors, including textiles, leather, furniture, jewellery and machinery.
Under the pact, Australia is offering zero-duty access to India for about 96.4 per cent of exports (by value) from Day One. Currently, many products invite 4-5 per cent customs duty in Australia.
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 statement said that from 29 December, tariffs on 85 per cent of Australia's exports to India will be eliminated and high tariffs on a further 5 per cent of goods will be phased down.
"Entry into force of the agreement before the New Year delivers a double bonus of two tariff cuts in quick succession: one as the agreement comes into effect and a second on 1 January 2023," it said.
It added that ECTA will save Australian exporters around $2 billion a year in tariffs, while consumers and businesses will save around $500 million in tariffs on imports of finished goods, and inputs to "our manufacturing sector".
The tariff commitments provided by India in the agreement will open up access for Australia's exporters of products including critical minerals, pharmaceuticals, cosmetics, lentils, seafood, sheepmeat, horticulture and wine, it said.
Australian suppliers across 31 sectors and subsectors will be guaranteed the highest standard of treatment that India grants to any future free trade agreement partner.
ECTA will also support tourism and workforce needs in regional Australia by making 1,000 work and holiday programme places available to young Indians, it said adding the pact maintains opportunities for Indian students graduating in Australia to undertake post-study work, with a bonus year of stay for high-performing STEM (science, technology, engineering, or mathematics) graduates.
"The Australian Government is pursuing further opportunities in goods and services, in addition to new commitments in areas such as digital trade, government procurement, and new areas of cooperation," it said.
Minister for Trade and Tourism Don Farrell said that the ECTA's two tariff cuts in quick succession intensify the up-front benefits of this agreement for exporters.
"Businesses are encouraged to get on the front foot and prepare themselves now to take advantage of the substantial improvements in market access to India under the new agreement. Austrade can assist existing and potential exporters benefit from the lowering of trade barriers into the Indian market," he said.
India and Australia entered into a strategic partnership in 2009, which was elevated to a Comprehensive Strategic Partnership in 2020.
All figures are in US dollars.
With inputs from PTI.