Merchandise exports likely to increase by $10bn in 2026-27
Commerce and Industry Minister Piyush Goyal said that duties on 100% tariff lines would be eliminated by Canberra under the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) which was approved by the Australian Parliament on 22 Nov 2022.
The ECTA would give a big boost to several sectors of the economy, especially textiles, gems and jewellery and pharmaceuticals while 10 lakh jobs would be created in India as a result of the trade pact, he said.
The Agreement would also open new opportunities for the service sector in India and would immensely benefit students by offering them an opportunity to work in Australia.
Annual Visa quota of 1,800 is to be instituted for India Yoga teachers and Chefs.
The Minister underscored that the Agreement was finalized after extensive and exhaustive stakeholder consultations, and pointed out that it was unanimously accepted and supported by all quarters.
Goyal observed that the Agreement reflected the confidence and trust between the two countries, and India’s growing stature in the world. The ECTA would further deepen India’s relationship with Australia, a vibrant democracy which shared several of India’s interests.
Signed on 2 April 2022, the trade pact is now ready for ratification for its early implementation.
Passed by Australian lawmakers on 22 Nov 2022, the Ind-Aus ECTA Bill and the DTAA amendment bill are being placed before Executive Council to get Royal Assent. The Agreement will enter into force shortly, on a mutually convenient date once both the sides have completed their domestic processes.
It is expected that with this agreement, the total bilateral trade will cross US$45-$50 billion in 5 years from existing US$31 billion.
India’s Merchandise Exports is likely to increase by US$10 billion by 2026-27, said the Commerce and Industry Ministry.
Moreover, since the labour-intensive sectors will be benefitted, the pact is expected to create ample opportunities for investment, promotion of start-ups. Similarly, it would provide enhanced job opportunities for Indians in Australia and increased remittance flows to 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 in increasing presence of higher value products of advanced technology, thereby promoting vertical movement in the value chain (Engineering, Electronics, Pharmaceuticals & Medical devices).
The Pharmaceuticals sector will be among the major gainers as drugs approved in other developed jurisdiction will get fast track approval for patented, generic and biosimilar medicines in Australia.
As regards trade in services, Australia has offered wide ranging commitments in around 135 sub sectors. which cover key areas of India’s interest like IT, ITES, Business Services, Health, Education and Audio Visual.
Some of the key offers from Australia in the services space include: Quota for chefs and yoga teachers; Post study work visa of 2-4 years for Indian students on reciprocal basis; mutual recognition of Professional Services and Other licensed/regulated Occupations; and Work & Holiday visa arrangement for young professionals.
Moreover, the long pending issue under double taxation related to IT/ITES has been resolved under this Agreement which will provide a financial savings of more than US$200 million per year as per the estimates received from the Industry Associations, said the Ministry.
As part of the commitments under ECTA, for the Comprehensive Ind-Aus ECTA, Chief Negotiators from both the sides will have a meeting shortly to finalise the Scoping document.
In a nutshell, the India-Australia ECTA will further cement the already deep, close and strategic relations between the two countries and will significantly enhance bilateral trade in goods and services, create new employment opportunities, raise living standards, and improve the general welfare of the peoples of the two countries, the ministry said. fiinews.com
