India-Australia ECTA ratified by Australian Parliament ahead of PM Anthony Albanese's India visit in early 2023 | The Financial Express

India-Australia ECTA ratified by Australian Parliament ahead of PM Anthony Albanese’s India visit in early 2023

The agreement will become operational on a date which is decided mutually by both countries.

India-Australia ECTA ratified by Australian Parliament ahead of PM Anthony Albanese’s India visit in early 2023
Australian Parliament ratifies India -Australia Economic Cooperation and Trade Agreement (AI-ECTA) (File shot of Indian and Australian PM at G20)

Ahead of the expected visit of the Australian Prime Minister, Anthony Albanese in the first quarter of 2023, the Parliament of that country has put its stamp of approval on the India -Australia Economic Cooperation and Trade Agreement (AI-ECTA).

The agreement will become operational on a date which is decided mutually by both countries. In India such agreements are approved by the Union Cabinet before they become operational and in Australia it has to get ratified by their Parliament. This will now be followed by harmonisation of codes and customs regime and a day before the implementation the customs authorities will issue a notification a day before the implementation.

What does the FTA mean for both countries?
Once the FTA becomes operational 6,000 broad sectors of India will get duty-free access to the Australian market. These labour intensive sectors that could get benefitted include leather, furniture, textiles, some agricultural and fish products, electrical goods, railway wagons, sports goods, machinery, and jewellery among others.

From the day it starts, the Australian side has offered zero-duty access to India for about 96.4 per cent of exports (by value) and many products are covered under this that are currently attracting around 4-5 percent customs duty in Australia.

Based on the information available in the public domain in 2021-22 India’s goods exports to Australia stood at $8.3 billion and imports from the country aggregated to $16.75 billion. In the next five years with the agreement in place the bilateral trade would go up from the present $27.5 billion to $45-50 billion.

Digital services pact with India
Speaking to a select group of journalists on the sidelines of the ‘No Money for Terror’ (NMFT) Ministerial Conference on Counter-Terrorism Financing in New Delhi, Tim Watts, Australia’s Assistant Minister for Foreign Affairs had Australia is keen to have a pact on digital services as part of the Comprehensive economic cooperation agreement (CECA).

According to the Australian government’s ‘An India Economic Strategy to 2035’ an agreement could facilitate digital trade and this could be possible by including modern and forward-looking rules that support the use of digital tools to enable trade.

During the proposed visit of the Australian PM next year, the CECA will get a push which is important for the expansion of economic relations between the two countries.

According to Minister Watts that the trade ministers of both sides have committed themselves to start negotiations on digital services “as soon as possible.’’ Terming the digital trade as a real worthwhile agenda, in response to a question, Minister Watts had said that it is not just about data but it underpins all trade. Adding, it can facilitate trade across the board.

Australia & China
To a question related to the meeting of Chinese and Australian foreign ministers and talks between PM Albanese and President Xi Jinping of China on the sidelines of G20 Leaders Summit in Bali, Indonesia, the minister termed it as an effort to “stabilise our relationship’’ .

Following the ratification by its Parliament, in a statement issued by the Australian High Commission, New Delhi, Prime Minister Anthony Albanese of Australia said “today’s passage of legislation demonstrates Australia’s commitment to free trade and the rules-based trading system. It is an acknowledgement of the centrality of trade to our economic resilience and ongoing prosperity.”

Said Don Farrell, Minister for Trade and Tourism “Closer economic ties with India are a critical component of the Australian Government’s trade diversification strategy.”

Adding, “The quality of ECTA, in terms of market access and opportunity for Australian businesses, demonstrates India’s commitment to our bilateral economic partnership.”

Get live Share Market updates and latest India News and business news on Financial Express. Download Financial Express App for latest business news.

First published on: 22-11-2022 at 17:10 IST