Explainer / India, Australia CECA talks

• Commerce and Industry Minister Piyush Goyal and his Australian counterpart Dan Tehan have held talks to expedite talks for the proposed free trade agreement (FTA), which aimed at enhancing economic ties between the countries.

• Both sides also directed the officials to speed up the negotiations to pave the way for a comprehensive agreement, which is officially dubbed as Comprehensive Economic Cooperation Agreement (CECA).

• The ministers appreciated the progress made in various rounds of talks between the chief negotiators of both sides and discussed the way forward for an early conclusion of an interim agreement.

What is the benefit of CECA?

• India signed CECA with Singapore in June 2005. Negotiations are also going on with Thailand, Malaysia, Indonesia and BIMSTEC countries. 

• India and Australia have agreed to conclude talks on CECA by the end of 2022, and an early harvest trade deal by end of this year.

• In an early harvest or interim agreement, two trading partners significantly reduce or eliminate customs duties in a certain specified number of goods. These duties were removed in the maximum number of goods traded between them in a free trade agreement or CECA. They also liberalise norms for enhancing trade in services and boost investments in a CECA.

India, Australia CECA negotiations

• India and Australia launched negotiations for a Comprehensive Economic Cooperation Agreement in May 2011. There were many rounds of negotiations before both countries decided to suspend negotiations in September 2015, pending the outcome of other multilateral regional negotiations.

• In June 2020, as part of the Joint Statement on a Comprehensive Strategic Partnership between India and Australia, Prime Ministers Narendra Modi and Scott Morrison decided to re-engage on a bilateral CECA while suitably considering earlier bilateral discussions, where a mutually agreed way forward can be found.

• This year, at the 17th India-Australia Joint Ministerial Commission meeting on September 30, ministers Piyush Goyal and Dan Tehan formally re-launched CECA negotiations and reaffirmed their commitment to liberalise and deepen bilateral trade in goods and services, and to conclude the negotiations on a full CECA by the end of 2022.

• Recent years have seen remarkable growth in the trading relationship between India and Australia, fuelled by the many complementarities between the two economies.

• In 2020-21, India’s exports to Australia were $4.04 billion, while imports were $8.24 billion.

• India mainly exports refined petroleum, medicaments, railway vehicles including hovertrains, pearls and gems, jewellery, and made-up textile articles. While imports include coal, copper ores and concentrates, gold, vegetables, wool, fruits and nuts, lentils, and education-related services.

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