India-Australia to sign a historic Economic Cooperation and Trade Agreement (Ind-Aus ECTA), as per the agreement Australia would reduce duties on products with a 100 percent tariff.
The trade agreement is to boost several sectors of the economy, especially textiles, gems and jewellery and pharmaceuticals.
Before going into effect, the deal that the two nations inked in April of this year required to be ratified by the Australian parliament. Piyush Goyal, a union minister, called it a “landmark occasion” and expressed his gratitude to the prime ministers of Australia and India for making it happen. After its implementation, he claimed, the codes and the customs regime will be harmonised.
Anthony Albanese Prime Minster of Australia announced on twitter “Our Free Trade Agreement with India has passed through parliament”
Here are some implications of the FTA for Australia and India:
- The prospects and advantages of more open trade with India will soon be available to Australian exporters, firms, employees, and consumers once the FTA agreement is put into effect.
- The India-Australia Economic Cooperation and Trade Agreement (AI-ECTA) will become effective 30 days (or at a later date mutually agreed upon) after each party has confirmed in writing that all domestic conditions have been satisfied.
- Following ratification, India and Australia will decide when to put the agreement into effect. A day before to that day, customs authorities will also issue a notification.
- FTA will give Australian companies access to a new market where they can contact the 1.4 billion customers of the world’s fastest-growing major economy.
- When it is put into effect, the agreement will give India’s over 6,000 major industries—including textiles, leather, furniture, jewellery, and machinery—duty-free access to the Australian market.
- Additionally, Australia has provided zero-duty access to India since day one for almost 96.4% of exports (measured by value). This applies to a wide range of goods that are now subject to a 4%–5% customs charge in Australia.
- The pact would mostly help the textile and garment industries, a few agricultural and fishery items, leather, footwear, furniture, sporting goods, jewellery, machinery, electrical goods, and railroad carriages.
In a nutshell, the India-Australia ECTA will strengthen the two nations’ already solid, strategic relationships, dramatically increase their bilateral commerce in commodities and services, generate new job opportunities, boost living standards, and generally promote the welfare of their respective populations.