India and Australia have mutually benefited in the last one year since the operationalisation of the India-Australia Economic Cooperation and Trade Agreement, the two countries said. Negotiations are underway for concluding the Comprehensive Economic Cooperation Agreement between the two countries but there is no defined deadline at the moment.
“In the year since this agreement came into effect, we have seen enormous gains for a range of Australian exporters, including our farmers, manufacturers, and our universities. This is a relationship we need to invest in and I look forward to working with India to take our trade agreement to the next level,” said Don Farrel, Australia’s minister for trade and tourism in a statement on Friday.
Rajesh Agrawal, Additional Secretary, Department of Commerce said that while it is too early to assess the gains, the offshoots in the first one year are positive in nature. “FTAs do build confidence in business,” he told reporters on Friday.
He further said that the negotiations on the CECA are progressing well. “Some negotiations on the rules or origin will take place in January. This is one area where we have to carry out detailed product specific exercises,” he said, while declining to give a timeline for the conclusion of the negotiations.
According to official data, India’s exports to Australia grew 14% year on year in value terms to $5.87 billion between April and November 2023 while imports contracted 19% year on year to $11.46 billion in the period. The trade deficit between the two countries was $5.2 billion between April and November 2023 as against $8.6 billion in the corresponding period a year ago. Exports to Australia on preferential lines grew by 17.8% in the same period and grew by 15.14% on non-preferential lines.
The ECTA, an interim trade pact, was signed between India and Australia in April 2022 and came into force from December 29, 2022.
Meanwhile, according to the Australian trade ministry release, agricultural exports to India from Australia are 50% higher since the trade agreement came into force. This includes massive boost for products like sheep meat, seafood, broad beans, citrus and almonds. “Most of our industrial exports to India are up by around 30%, with pharmaceuticals, wood and paper and cochlear implants leading the charge,” it further said.
From January 1, 2024, the third round of tariff cuts will come into force. Australian exports to India will be even more competitive, with more tariff cuts on high quality Australian products such as seafood, cherries, sandalwood and wine. For India, more tariff cuts are expected in steel and aluminium.
