According to Union Minister Piyush Goyal, on Saturday, India and Australia inked an interim trade deal that would boost bilateral trade to about $50 billion over the next five years.
“In the next five years, the trade treaty will increase bilateral trade from $27 billion to about $45-50 billion.” Textiles, pharma, hotels, G&J, IT, and startups, among other sectors, have enormous potential for generating jobs in both countries,” he remarked during the signing ceremony of the India-Australia Economic Cooperation and Trade Agreement.
In the presence of PM Narendra Modi and Australian Prime Minister Scott Morrison, Commerce and Industry Minister Piyush Goyal and his Australian colleague Dan Tehan inked the agreement in a virtual ceremony.
Goyal expressed confidence that the multifaceted and forward-looking trade agreement would strengthen connections between the two countries.
“The relationship has been becoming stronger. Our exports to Australia have increased at the fastest rate in the recent year. We’re excited to accelerate the pace of the discussions “The trade deal will usher in a new age of trade and economic connections, according to the minister.
PM Modi called the trade deal a “watershed moment” in India-Australia relations, while his Australian colleague Scott Morrison said it would strengthen the two countries’ already tight ties.
According to a statement published by the Commerce Ministry on Friday, the deal “encompasses trade in goods and services” and would “further consolidate the existing strong and strategic linkages between the countries.”
According to the statement, it will improve bilateral product and service trade, create new employment opportunities, raise living standards, and benefit the two countries’ general welfare.
Over 95% of Indian Goods get duty free.
After signing a long-awaited trade agreement between New Delhi and Canberra on Saturday, more than 95% of about 12,000 Indian items would have duty-free access to the Australian market. Official sources indicated that India would leave its delicate dairy industry out of the temporary accord and allow premium Australian wine to be imported at reduced tariffs.
Of course, the pact’s scope will be increased in five years to include 100% Indian items. As it will be officially named, the Economic Co-operation and Trade Agreement would provide duty-free and concessional access to almost 70% of Australian exports to the market. In ten years, this will be raised to cover 85% of commodities.
Exporters in critical industries, particularly labour-intensive ones such as agriculture, textiles and apparel, and medicines, would be able to enter the Australian market duty-free. In addition, over 100 services in New Delhi will be improved. Notably, the agreement would allow qualified professionals from India to travel freely under the so-called Mode-4 services. Shortly after, both parties will negotiate a more comprehensive free trade agreement (FTA) to expand on this collaboration.
How Indian Exporters get benefits.
The contract will take into force on a mutually agreed date after being ratified by India’s Union Cabinet and Australia’s Parliament, with “almost 6,000 tariff lines available for Indian exporters at zero tax” on the first day, according to PTI, citing sources.
According to the report, the Scott Morrison-led government will offer zero-tariff access to New Delhi on 96.4% of value exports from the first day of the agreement. Previously, a fee of 4% to 5% was applied to certain items, which are many. Between Australia and India, roughly 6,500 tariff lines are exchanged, whereas India has approximately 11,500 tariff lines.
According to reports, India benefits significantly from this agreement since it imports most of its raw materials and intermediate goods from Australia. On the other hand, India would provide duty-free access to Australia to over 70% of its tariff lines, including coal exports. Coal accounts for over 74% of Australian imports and is now subject to a charge of 2.5%.
Depending on the price range, discounts on Australian wines are planned to be provided in two categories. The wine’s customs duty will be cut from 150% to 25% over ten years once the agreement is in place. The deal would include goods, services, rules of origin, Sanitary and Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT), customs procedures and trade facilitation, legal and institutional issues, natural person mobility, and trade remedies.
Australian Government view
According to Australian Prime Minister Scott Morrison, the trade deal, which is set to be signed on Saturday, represents “one of the largest economic doors that the world has to open today,” according to Australian Prime Minister Scott Morrison.
Morrison, who has been in talks with India for a decade, is set to announce a general election in the coming days. He has been keen to complete the trade pact before campaigning begins.
The Economic Cooperation and Trade Agreement will be signed in a virtual ceremony by Trade Minister Dan Tehan and India’s Commerce and Industry Minister Piyush Goyal. According to the federal government, both nations will continue to work toward a comprehensive free trade agreement.
Indian Government view
Union Minister Piyush Goyal, referring to India and Australia as two brothers, said that the two nations are natural allies, united by common principles of democracy, the rule of law, and transparency.
At a virtual signing ceremony for the India-Australia Economic Cooperation and Trade Agreement, the Union Minister said that both countries supported each other during the COVID-19 epidemic.
“India and Australia are natural allies who share democratic, rule-of-law, and transparency ideals. During the epidemic, the two countries supported each other like brothers “he said
The relationship between the two nations, according to Piyush Goyal, is built on the pillars of trust and dependability.
“Our connection is built on the foundations of trust and dependability. Our expanding geostrategic involvement via the Quad and supply chain resilience projects is a good example of this “he said
“I envision a wonderful future of the alliance between India and Australia and a shared commitment to realizing it,” Goyal added, recalling Indian Prime Minister Narendra Modi’s statements when he visited Australia in 2014.
According to Prime Minister Narendra Modi, the India-Australia Economic Cooperation and Trade Agreement is a “watershed moment” in bilateral relations. The preliminary free trade agreement promises to reduce tariffs on Australian products sent to India by 85%.
Edited by Prakriti Arora