The Interim Free Trade Agreement (FTA) between India and Australia entered into force today and is expected to double bilateral trade and commerce from $45 billion to $50 billion in five years.
The India-Australia FTA will provide tax exemptions for thousands of domestic goods such as Australian textiles and leather, one of the key markets for Indian exporters, according to Khalid Khan, Vice President of the Federation of Indian Export Organizations (FIEO). provide access. .
Here’s what you need to know about the India-Australia bilateral FTA.
- The Economic Cooperation and Trade Agreement (ECTA), signed on 2 April, will provide duty-free access to over 6,000 Indian exporters across a broad range of sectors, including textiles, leather, furniture, jewelery and machinery for the Australian market. .
- ECTA will not only provide cheap raw materials from Australia to many sectors including steel and aluminium, but also facilitate increased investment from Australia and support India’s manufacturing sector.
- ECTA facilitates access to Australian IT sector projects, enables dual degree education programs between the two countries, and promotes exports in the textile sector, which employs 40,000 people a year.
- Labor-intensive sectors such as textiles and apparel, some agricultural and fish products, leather, footwear, furniture, sporting goods, jewellery, machinery and electrical goods will benefit significantly.
- Under the agreement, Australia provides duty-free access to India from day one on approximately 96.4% of its export value (in value terms).
- In 2021-2022, India’s merchandise exports to Australia will reach $8.3 billion and imports from the country will reach $16.75 billion. Tariffs on 85% of Australian exports to India will be removed from 29 December.
- According to CII, the deal will boost India’s merchandise exports by $10 billion by 2026-27, create an additional 100,000 jobs in India and create more job opportunities in Australia. Expected.
- According to CII, India offers duty-free access on 70.3% of its tariff lines to Australia (40.3% from day one and the remaining 30% in phases).
- According to a report released by the Global Trade Research Initiative (GTRI), $23 billion worth of goods will be duty-free from the first day of the trade deal’s implementation.
- India offers duty-free access to coal, calcined alumina, manganese ore, copper concentrate, bauxite, mutton, rock lobster, macadamia nuts, cherries and wool.
The Directorate General of Trade (DGFT) has notified the procedure for allocating Tariff Quotas (TRQs) for certain products including lentils, oranges and pears under the Agreement.
Sanjay Budia, chairman of CII’s National Committee on EXIM and managing director of Patton International, said Australia and India are increasingly working together as strategic and economic partners.
“The India-Australia ECTA is a landmark agreement to leverage the industry to tap its enormous untapped potential. It is expected to create opportunities and, most importantly, strengthen bilateral ties between two key players in the Indo-Pacific region.
Source: Money Control