Following the Australian Parliament’s approval of the Free Trade Agreement with India, duties on 100 percent tariff lines would be eliminated by Australia under the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA).
According to Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Piyush Goyal, the ECTA would give a big boost to several sectors of the economy, especially textiles, gems and jewellery and pharmaceuticals and 10 lakh jobs are estimated to be created as a result of the ECTA.
IndAus ECTA, which was signed in April 2022, is now ready for ratification for its early implementation. The Ind-Aus ECTA Bill and the DTAA amendment bill have been passed by the Australian Parliament, and are being placed before the Executive Council to get Royal Assent.
ECTA is India’s first trade agreement with a developed country in more than a decade. It is expected that with this agreement, the total bilateral trade will cross US$ 45-50 bn in five years from the existing US$ 31 bn. Moreover, since the labour-intensive sectors will be benefitted, it is expected to create additional employment of at least 10 lakhs jobs in India.
Around 96% of Australia’s exports are raw materials and intermediate products which will allow many Indian industries to get cheaper raw materials and make them competitive. Investments will help increase the presence of higher-value products of advanced technology, thereby promoting vertical movement in the value chain (Engineering, Electronics, Pharmaceuticals & Medical devices). Another major gain is in the Pharmaceuticals sector, where drugs approved in other developed jurisdictions will get fast-track approval for patented, generic and biosimilar medicines.