India Australia Economic and Cooperation Trade Agreement
Recently The Economic Cooperation and Trade Agreement (ECTA) between India and Australia has come into force.
- This is the first Free Trade Agreement (FTA) that India has signed with a major developed country after more than a decade.
- Australia is also the third OECD country after Japan and South Korea with which India has signed a Free Trade Agreement (FTA).
- ECTA provides an institutional mechanism to encourage and improve trade between the two countries.
- It covers almost all tariff lines in effect between India and Australia.
- ECTA is the second trade agreement for India to become effective in the year 2022. Earlier, the India-UAE Comprehensive Economic Partnership Agreement has also come into force.
Benefits from the Economic Cooperation and Trade Agreement (ECTA)
- Bilateral trade is expected to increase to US$ 45-50 billion in the next five years.
- At least 10 lakh additional employment opportunities will be created in India.
- The doors of new investment opportunities will open.
- Start-ups will get a boost.
Salient features of ETCA-
- Australia will provide Preferential Market Access on its 100% tariff line, which will benefit India. These include India’s labour-intensive export sectors such as gems and jewellery, textiles, leather, footwear.
- Australia has also promised market access to several service sub-sectors. These include IT, ITES, health, education etc.
- A separate contract for pharmaceutical products has been made in this agreement. This will enable faster approval of patented, generic and biosimilar drugs.
- The agreement also covers areas such as rules of origin, sanitary and phytosanitary (SPS) measures, dispute settlement mechanisms, movement of natural persons (professionals).
Source – PIB