Chinmaya IAS Academy – Current Affairs Chinmaya IAS Academy – Current Affairs
- Recently, India signed a historic trade agreement with Australia, the India-Australia Economic Cooperation and Trade Agreement (Ind- Aus ECTA).
- In February 2022, India and Australia announced that they were going to sign such an agreement.
- The negotiations for India-Australia ECTA were formally re-launched in September 2021 and concluded on a fast-track basis by the end of March 2022.
Economic Cooperation and Trade Agreement
- It is the first Free Trade Agreement (FTA) that India has signed with a major developed country in over a decade.
- In February, India signed an FTA with the UAE and is currently working on FTAs with Israel, Canada, UK and the European Union.
The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries, and covers areas like:
- Trade in Goods, Rules of Origin.
- Trade in Services.
- Technical Barriers to Trade (TBT).
- Sanitary and Phytosanitary (SPS) measures.
- Dispute Settlement, Movement of Natural Persons.
- Telecom, Customs Procedures.
- Pharmaceutical products, and Cooperation in other Areas.
Significance of the Agreement
- It will provide zero-duty access to 96% of India’s exports to Australia including shipments from key sectors such as engineering goods, gems and jewellery, textiles, apparel and leather.
- It will boost bilateral trade in goods and services to USD 45-50 billion over five years, up from around USD 27 billion, and generate over one million jobs in India, according to a government estimate.
- It will also give about 85% of Australia’s exports zero-duty access to the Indian market, including coal, sheep meat and wool, and lower duty access on Australian wines, almonds, lentils, and certain fruits.
Free Trade Agreements
- It is a pact between two or more nations to reduce barriers to imports and exports among them.
- Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
- The concept of free trade is the opposite of trade protectionism or economic isolationism.
- FTAs can be categorised as Preferential Trade Agreement, Comprehensive Economic Cooperation Agreement (CECA, Comprehensive Economic Partnership Agreement (CEPA).
India- Australia Trade Relation
- India and Australia enjoy excellent bilateral relations that have undergone transformational evolution in recent years, developing along a positive track, into a friendly partnership.
- This is a special partnership characterised by shared values of pluralistic, parliamentary democracies, Commonwealth traditions, expanding economic engagement, long standing people-to-people ties and increasing high level interaction.
- The India-Australia Comprehensive Strategic Partnership initiated during the India-Australia Leaders’ Virtual Summit held in June 2020 is the cornerstone of India-Australia multi-faceted bilateral relations.
- Growing India-Australia economic and commercial relations contribute to the stability and strength of a rapidly diversifying and deepening bilateral relationship between the two countries.
- India and Australia have been each other’s important trading partners.
- Australia is the 17th largest trading partner of India and India is Australia’s 9th largest trading partner.
- India-Australia bilateral trade for both merchandise and services is valued at USD 27.5 billion in 2021.
- India’s merchandise exports to Australia grew 135% between 2019 and 2021. India’s exports consist primarily of a broad-based basket largely of finished products and were USD 6.9 billion in 2021.
- India’s merchandise imports from Australia were USD 15.1 billion in 2021, consisting largely of raw materials, minerals and intermediate goods.
Way Forward
Shared values, shared interests, shared geography and shared objectives are the bedrock of deepening India-Australia ties and the cooperation and coordination between the two countries have picked up momentum in recent years.
SOURCE: THE HINDU,THE ECONOMIC TIMES,MINT
