The India-Australia trade agreement is set to enter into force from December 29 after the Indian government finalized domestic requirements to enable its implementation, leading to benefits for the country’s IT industry, students and labor-intensive sectors. The Australian government on Wednesday welcomed the Indian side’s confirmation that all requirements have been met for the implementation of the Economic Cooperation and Trade Agreement (ECTA), which was signed on April 2. This was India’s first trade deal with any developed country in a decade. .
Australia completed its domestic demands for a trade deal last week with the unanimous approval of government bills by both houses of parliament. The Australian government’s statement said the implementation of the deal would lead to two tariff reductions by January 1.
New Year brings a double bonus in the form of two tariff cuts
“Tariffs on 85 per cent of Australian exports to India will be abolished from 29 December and high tariffs on another 5 per cent of goods will be phased out. The entry into force of the agreement before the New Year brings a double bonus in the form of two tariff cuts in quick succession: one when the agreement enters into force and the second on January 1, 2023,” the statement said. “The date is set! The Economic Cooperation and Trade Agreement will enter into force on 29 December and will provide new market access opportunities for both countries and secure the [Australia-India] friendship for decades to come,” Australian High Commissioner Barry O’Farrell tweeted.
Indian officials said the deal is expected to increase two-way trade to $45 billion to $50 billion over five years from the current $31 billion, and India’s merchandise exports to Australia are expected to jump $10 billion from $7 billion by 2026-27 dollars. The two-way trade also has the potential to create more than a million additional jobs in India, besides increasing remittance flows into the country, they said.
ECTA will save Australian exporters about $2 billion in duties annually, while consumers and businesses will save about $500 million in duties on imports of finished goods and inputs for Australia’s manufacturing sector, the statement said. The tariff commitments provided by India in the agreement will open access for Australian exports such as important minerals, pharmaceuticals, cosmetics, lentils, seafood, mutton, horticulture and wine.
