India-Australia Economic Co-operation and Trade Agreement
Recently India and Australia have signed Economic Cooperation and Trade Agreement (ECTA).
The India-Australia ECTA is India’s first trade agreement with a developed country after almost a decade.
Highlights of the agreement
- India will eliminate tariffs on more than 85% of the goods exported to it from Australia. Also, under this arrangement, this export will be increased by 91% in the next 10 years.
- Australia will provide zero-duty access to its market for 96 per cent of Indian goods exported from India. These include products from core sectors such as engineering goods, gems and jewellery, textiles, apparel and leather.
- Under this, duty-free access will be expanded to 100% of goods exported from India in the next five years.
- Indian graduates in Science, Technology, Engineering and Mathematics (STEM) will be given a post-study work visa.
- Australia has agreed to amend its domestic tax law. Under this, the taxation system on offshore income (income earned in another country) of Indian companies providing technical services in Australia will be abolished.
Importance of India-Australia Relations
- Australia is India’s 17th largest trading partner in the current financial year. India, on the other hand, is Australia’s 9th largest trading partner in the current financial year.
- The two countries have a strong strategic partnership.
- Both the countries have also signed the Civil Nuclear Cooperation Agreement.
- Regular military exercises (e.g.: AUSINDEX) are conducted between the two countries.
- ECTA will boost bilateral goods and services trade. The agreement is expected to generate bilateral trade of $45-50 billion over the next five years. The current bilateral trade is around $27 billion. This agreement will create more than one million employment opportunities in India.
Source – The Hindu