The Australia-India Economic Cooperation and Trade Agreement (Ind-Aus ECTA), recently approved by the Australian Parliament, marks the first Free Trade Agreement (FTA) that India has entered with a developed country in over a decade. This Agreement signifies a step forward in economic and trade relations between India and Australia.
Understanding Ind-Aus ECTA
The Ind-Aus ECTA is a comprehensive agreement encompassing cooperation in various sectors of bilateral economic and commercial relations. It is designed to cover areas such as Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade, Sanitary and Phytosanitary measures, Dispute Settlement, Movement of Natural Persons, Telecom, Customs Procedures and Pharmaceutical products.
The ECTA provides an institutional mechanism to bolster and streamline trade between the two countries, covering nearly all tariff lines dealt with by both nations. As a result of this agreement, India will benefit from preferential market access provided by Australia on 100% of its tariff lines, including labour-intensive sectors like Gems and Jewellery, Textiles, leather, footwear, and furniture.
Ind-Aus ECTA: Impact on Visa Policies and Job Creation
In addition to trade benefits, the ECTA has implications for mobility between the two nations. Indian graduates in STEM fields will be granted extended post-study work visas. Australia will also initiate a program to grant visas to young Indians seeking working holidays in the country. A yearly visa quota will be set for Indian Yoga teachers and chefs. Consequently, it is projected that the ECTA will facilitate the creation of nearly one million jobs.
Exploring the India-Australia Relationship
India and Australia have always shared warm bilateral ties, evolving into a friendly partnership characterized by shared democratic values, expanding economic engagement, people-to-people contact and high-level interaction. The Comprehensive Strategic Partnership, initiated during the India-Australia Leaders’ Virtual Summit in June 2020, further strengthens these relations.
As trading partners, both nations have seen their commercial ties substantially grow. In 2021, the bilateral trade for both merchandise and services reached USD 27.5 billion. Between 2019 and 2021, India’s merchandise exports to Australia surged by 135%.
Collaborations Beyond Trade: Supply Chain Resilience Initiative and QUAD
India and Australia are also participants of the trilateral Supply Chain Resilience Initiative (SCRI) along with Japan that aims to fortify supply chains in the Indo-Pacific Region. Furthermore, both nations are members of the QUAD grouping which includes the US and Japan, working together to enhance cooperation on shared concerns.
Looking Ahead: The Impact of ECTA
The Ind-Aus ECTA is expected to strengthen the already deep and strategic relations between both nations while boosting bilateral trade in goods and services. This will create employment opportunities, raise living standards, and contribute to the welfare of the people in both countries.
India and Australia continue to share a vision of a free, inclusive and rules-based Indo-Pacific region. Adherence to international law, specifically the United Nations Convention on the Law of the Sea (UNCLOS), is a priority for both nations. It represents a commitment to resolve disputes through peaceful means rather than unilateral or coercive actions.
