The India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) has officially come into force from December 29, 2022.
The two countries had inked the ECTA earlier this year in April and with the agreement becoming operational today the bilateral trade between the two countries is expected to touch $45-50 billion in the next five years.
Starting today, zero-duty access is being offered by Australia to India for around 96.4 percent of exports (by value); duty free access to Indian exporters of around 6,000 broad sectors including labour intensive sectors like leather, textiles, sports goods, electrical goods, furniture, machinery and jewellery in the Australian market.
All you want to know
ECTA is expected to save Australian exporters around $2 billion a year in tariffs.
Businesses and consumers will save around $500 million in tariffs on imports of finished goods.
Australia is offering zero-duty access to India for more than 96.4 percent of exports (by value) from day one.
Also, more than 85 percent of Australian goods being exported to India tariffs will be eliminated. And, also, high tariffs on further 5 percent of goods are expected to be brought down.
India in the agreement has offered tariff commitments which are expected to give access to Australia exporters of products like wine, horticulture, cosmetics, lentils, seafood, sheep meat and pharmaceuticals.
And the service suppliers from that country are expected to benefit in partial or full access to more than 85 Indian services sectors and sub-sectors.
In regional Australia this trade agreement is also going to support tourism and workforce needs by making 1,000 holidays and work programme places available to the Indian youth.
Also, most importantly, this pact will give opportunities to Indian students who have graduated there to undertake postgraduate study work. And for high performing STEM (science, technology, engineering, or mathematics) graduates, there will be a bonus year of stay.
The customs advantage under this agreement the Indian apparel exporters will get greater market access as compared to their competitors.
In the last five years the Indian ready-made garment exports has witnessed a growth of an average of 11.84 percent.
So far India’s exports to Australia stand at $8.3 billion. In 2021-22 imports from the country aggregated to $16.75 billion.
The agreement operationalises ahead of the visit of Prime Minister Anthony Albanese in March. And also the next QUAD Leaders Summit.