The India-Australia Economic Cooperation and Trade Agreement, signed in April this year, entered into force on Thursday. Federal Commerce Minister Piyush Goyal said he expects at least two more free trade agreements to be signed in 2023.
At an event in Mumbai, Goyal said negotiations with the UK, the European Union and Canada are planned. Mr Goyal said his FTA with Australia would benefit a number of sectors, including textiles, gems, jewellery, and information technology, which would be aided by the elimination of double taxation. He expects India’s claims to Australia alone for his IT firms to rise from $200 million to $1 billion in the next five to seven years.
“Australia manufactures almost nothing, so there is a lot of potential for exporting finished goods to Australia. Australia is primarily a raw material and intermediate producer,” says Goyal. His FTA with India and Australia will be his second FTA that will come into force in 2022 after the India-UAE Comprehensive Economic Partnership Agreement came into force on his May 1st.
The government estimates that an additional Rs 100,000 jobs will be created in India under ECTA. “Indian yoga teachers and chefs can benefit from yearly visa quotas. Indian students above Rs. ),” said PIB.
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The Government has stated that India would like Australia to provide 100% of its tariff items, including all labour-intensive sectors interested in exporting to India, such as gems and jewellery, textiles, leather, footwear, furniture and food. It said it would benefit from preferential market access. , and agricultural products, engineering products, medical devices, and automobiles. Meanwhile, India offers preferential access to Australia on more than 70% of its tariff commodities, including commodities of export interest to Australia that are primarily raw materials and intermediates such as coal, mineral ores and wine.
Goyal defended India’s withdrawal from RCEP. As of now, India has separate trade agreements with 13 of her 15 countries in her RCEP, with only New Zealand and China remaining, due to an agreement with Australia.
Goyal said he expects bilateral trade between India and Australia to rise to US$31 billion in the five years the FTA is in place, adding that India will seek cheaper raw materials such as coal from Australia. While gaining access to the Indian finished goods market there.
With Australia’s new government ratifying the deal, 98% of India’s exports will enter the country tariff-free, Goyal said. Prime Minister Narendra Modi called the deal a “watershed” moment, unlocking enormous potential for trade and economic ties to boost business on both sides.
The first jewelery consignments under the India-Australia Economic Cooperation and Trade Agreement (ECTA) originated from Mumbai, Surat and Chennai on Thursday, the Gems and Jewelery Export Promotion Council said. GJEPC Chairman Vipul Shah said the deal will double the value of trade in gems and jewelery between the two countries over the next three years from $1.27 billion today to $2.5 billion. .
The think tank Global Trade Research Initiative (GTRI) said that $23 billion worth of trades would be tax-free from day one. GTRI estimates suggest that bilateral trade will exceed $70 billion over the next five years as trade relations are strong and Australia is gradually moving away from China,” he said. Co-founder Ajay Srivastava said in a statement.