A year of Australia India FTA (AI-ECTA)

Context: Recently, the Australia India FTA or Australia-India Economic Cooperation and Trade Agreement, (AI-ECTA) completed one year of implementation. 

About Australia India FTA (AI-ECTA)

• Australia India FTA or AI-ECTA is a Free Trade Agreement between India and Australia that covers almost all the tariffs between India and Australia respectively.
• India Australia Trade Relations: India has become Australia’s fourth largest export destination. Australia is now India’s 10th largest export market. 
  • Australia and India’s two-way goods trade has grown by nearly 60 per cent over the last five years. 
• Trade Deficit: In the first six months of the Australia India FTA coming into force, the trade gap between Australia and India has shrunk by 15 percent.
  • This is the result of increased Indian exports of pharmaceutical goods, electrical machinery, and iron and steel products. 
  • Ninety-six per cent of Indian goods now enter Australia completely tariff-free.
• Positive Results: The early results of the Australia India FTA have been positive and could show Indian officials the merits of global trade through free trade agreements and tariff elimination
  • Shipping Volume: shipped more than Rs 2 trillion worth of goods between countries.
• Future Partnership Scope: 
  • The partnership can boost the supply chains for the critical minerals India needs to manufacture solar panels, wind turbines and electric vehicles for net-zero targets. 
  • Australia has the high-quality universities India needs to educate the roughly 70 million young Ind­ians looking for a tertiary qualification by 2030.

About India and Australia Relations

• Common Values: shared values of a pluralistic, Westminster-style democracies, Commonwealth traditions, expanding economic engagement and increasing high level interaction
• History of Ties: Ties between India and Australia started immediately following European settlement in Australia from 1788.
  • Formally begun with establishment of India Trade Office in Sydney in 1941
• Bilateral Relationship: Both the countries have signed Comprehensive Strategic Partnership (CSP) from 2020.
  • High level participation between both the countries are also reflected in the 2+2 Foreign and Defence Ministerial Dialogue and Raisina Dialogue.
• Key Initiatives: Both India and Australia are members of the Commonwealth, IORA, ASEAN Regional Forum, Asia Pacific Partnership on Climate and Clean Development, Coalition for Disaster Resilient Infrastructure, International Solar Alliance (ISA) and Quad. 
• Trade Relations: India-Australia Economic Cooperation and Trade Agreement (“IndAus ECTA”) has been signed in 2022 to address the tariff between both the countries. 
• Civil Nuclear Cooperation: A Civil Nuclear Cooperation Agreement between the two countries was signed in September 2014 to allow Australian uranium to India for civil use
• Military Exercises: AUSINDEX , PITCHBLACK,  MALABAR
• Critical Minerals: Co-Investment in Australian Critical Minerals Projects was signed between Khanij Bidesh India Ltd. (KABIL), India and Critical Minerals Facilitation Office (CMFO) Australia.
• Diaspora: Indian community in Australia continues to grow and importance, with the population of about 976,000 (Census 2021)

Continue To Read: India-Australia Bilateral Relations

Source: Business Standards