• India’s exports to Australia have risen by 4.4 per cent year-on-year during April-February 2024-25 due to the Economic Cooperation and Trade Agreement (ECTA) implemented by both the countries in 2022.

• The agreement was signed on April 2, 2022. It came into force on December 29,2022.

• India-Australia ECTA has created pathways for robust trade, offering new avenues for businesses, entrepreneurs, and employment across both nations.

• Following the signing and implementation of the agreement, total bilateral trade reached $24 billion in 2023-24, marking an impressive 14 per cent growth in the country's exports to Australia as compared to 2022-23.

• The pact has brought benefits across several sectors such as textiles, pharmaceuticals, chemicals, and agriculture.

• Exports on new lines, such as Calcined Petroleum Coke, High-Capacity Diesel Generating Sets, and Air Liquefaction Machinery, demonstrate the expanding trade opportunities facilitated by the agreement.

• Sectors like electronics and engineering hold significant potential for future exports, offering promising prospects for further growth and innovation.

• Further, the imports of key raw materials such as metalliferous ores, cotton, wood and wood products have supported the growth of Indian industries, solidifying the mutually beneficial and complementary nature of the partnership.

Highlights of the agreement:

• The India-Australia ECTA provides an institutional mechanism to encourage and improve trade between the two countries. 

• India will benefit from preferential market access provided by Australia on 100 per cent of its tariff lines, including all the labour-intensive sectors of export interest to India, such as gems and jewellery, textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices and automobiles. 

• On the other hand, India will be offering preferential access to Australia on over 70 per cent of its tariff lines, including lines of export interest to Australia, which are primarily raw materials and intermediaries such as coal, mineral ores and wines.

• For trade in services, Australia has offered wide-ranging commitments in around 135 sub-sectors and Most Favoured Nation (MFN) status in 120 sub-sectors covering key areas of interest to India.

• On the other hand, India has offered market access to Australia in around 103 sub-sectors and Most Favoured Nation status in 31 sub-sectors from the 11 broad service sectors such as ‘business services’, ‘communication services’, ‘construction and related engineering services’, and so on.

• Australian wine will gain from reduced-duty access to the Indian market. Under ECTA, Australian wines priced above $5 for a 750ml bottle can enter India at reduced duties. 

• For the pharma segment, the pact would provide fast-track approvals and fast-track quality assessment/inspections of manufacturing facilities.

• In the services sector, benefits for India include post study work visa of 2-4 years for Indian students on reciprocal basis, and work and holiday visa arrangement for young professionals.

• The pact will create new opportunities for jobs and businesses in both countries, while laying the foundations for a full free trade agreement.

• It is estimated that an additional 10 lakh jobs would be created in India under ECTA. 

• Indian yoga teachers and chefs are set to gain with the annual visa quota. Over 1 lakh Indian students would benefit from post-study work visa (1.5-4 years) under the ECTA. The agreement is also likely to increase investment opportunities, promote exports, create significant additional employment and facilitate strong bonding between the two countries.

(The author is a trainer for Civil Services aspirants.)