The Global Trade Research Initiative (GTRI) said that while the India-Australia Economic Cooperation and Trade Agreement (ECTA) offers many concessions to exporters and importers from both countries, the concessions are product-specific and He said companies should check whether their products benefit from the agreement.
“We have proposed a seven-step process to ensure that companies do not miss any important details when importing or exporting under ECTA,” it said.
India’s Free Trade Agreement (FTA) utilization is low, and one factor is low awareness of the process and its benefits.
The procedure involves knowing the correct HSN code in the document, as India and Australia may have different tariff classifications for the same product.
In industry parlance, all products fall under the HSN (Harmonised System of Nomenclature) code. It helps in the systematic classification of goods around the world.
The “Rules of Origin” clause defines the minimum processing that must take place in an FTA member country so that the final manufactured product is called originating in that country. Under this provision, countries that have FTAs with India are not allowed to dump goods from third countries in the Indian market by simply labeling them. In order to export to India, the product must be given a certain added value. Rules of origin codes help curb the dumping of goods.
“Indian exporters should be aware of India’s export policies and import policies for products in Australia. We do not allow imports,” the GTRI added to the trade agreement. Simply provide tariff concessions and do not relax import policy provisions.
It added that if the product falls on the import ban list, it will not be allowed to be imported.
GTRI also requires Indian companies to compare MFN (Most Favored Nation) tariffs and trade agreement tariffs on their products as they will benefit from the agreement only if the tariffs under that agreement are lower than the MFN tariffs. also said.
MFN is a WTO (World Trade Organization) term that indicates that a country must impose the same import duty on a product from all countries. When two countries enter into a trade agreement, it is decided to reduce such tariffs on most products.
“To receive FTA tariff concessions, products must qualify as originating in the exporting country,” he added.
It also said that once it confirms that its products meet the standards of the rules of origin, it must apply for a Certificate of Origin (COO) to be issued by an institution designated by the Indian or Australian governments.
Ajay Srivastava is the co-founder of GTRI. He retired from the Government of India in March 2022. He has extensive experience in trade policy development, WTO and FTA related issues.
He was involved in the negotiation process of India’s FTAs with Japan and Australia.
