India-Australia Trade Agreement (By Yogita)

India and Australia signed an Economic Cooperation and Trade Agreement ( IndAus ECTA)
that their leaders hailed as a “watershed moment” and as “one of the biggest economic
doors there is to open in the world”. This is the second bilateral trade pact India has signed
with a developed nation after signing a similar agreement with the United Arab Emirates
earlier this year. The negotiations for the bilateral trade pact that was started in 2011 are
finally inked by the two countries after the resumption of talks in September 2021.
The India-Australia Economic Cooperation and Trade Agreement is expected to generate
trade worth 45-50 billion for both the countries, double of what it is now, and will also create
1 million jobs over the next 5 years.

Significance of IndAus ECTA

The IndAus Pact is expected to give a big push to the bilateral trade between the two
countries as it has been discussed that a large number of goods would be free from tariffs as
well as non-tariff restrictions.
The IndAus ECTA has a preamble that contains different sections for governing the trade
agreed upon by both countries. It has a section that contains provisions for the settlement of
any trade dispute between both countries. Both the parties have agreed to come up with
every possible solution in case any trade dispute arises under article 13.5. Since both
Australia and India are members of the World Trade Organisation (WTO), it has been
decided that in case they want to seek international arbitration anytime in the future, they
can opt for the WTO.
One of its sections also lays down the “Rules of Origin” for the exported goods that are
aimed at creating anti-dumping measures. The principle of Rules of Origin basically means
that the goods should be completely produced in the territory of one or both parties which
ensures no waste material will be exported from either side unless they contribute to the
production of any of the listed items under ECTA.
The most important feature of this trade pact is that after signing this India for the first time
has signed an agreement that has a compulsory review mechanism after 15 years of
implementation.

Tariff Reductions
Both India and Australia under the ECTA have proposed to significantly cut the tariffs duties.
For about 96 percent value of Indian exports, Australia will provide duty-free access
according to the agreement.
Australia will benefit from the lower tariffs on the goods that it imports to India such as
almonds, wines, lentils, mandarins, pears, apricots, and strawberries. Australia will also
benefit from the zero-duty access on coal from a 2.5% import duty before the agreement.

References
1. https://www.thehindubusinessline.com/blexplainer/all-about-india-australia-economic-
co-operation-and-trade-agreement/article65288995.ece
2. https://economictimes.indiatimes.com/news/economy/foreign-trade/view-india-austral
ia-trade-deal-to-push-bilateral-ties-to-new-level/articleshow/90660252.cms
3. https://indianexpress.com/article/india/india-australia-ink-economic-cooperation-and-t
rade-pact-to-boost-ties-7849230/
4. https://asia.nikkei.com/Politics/International-relations/Indo-Pacific/India-Australia-trad
e-pact-pushes-back-against-panda-in-the-room
5. https://www.weeklytimesnow.com.au/news/national/explained-what-you-need-to-kno
w-about-the-india-free-trade-agreement/news-story/7cc6fe410b174685be530743d31
d1152?gclid=Cj0KCQjwjN-SBhCkARIsACsrBz5nm8LOtsk8M3mN4UcNt6AGLdmf8fN
EadoCDIF-aB7NcikRECexDlAaAvOVEALw_wcB