In News:

The India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) completes two years of remarkable success, driving mutual growth and showcasing the complementarity of both economies.

Key Achievements:

• Bilateral Merchandise Trade Surge:
  • Trade increased from USD 12.2 billion (2020-21) to USD 26 billion (2022-23).
  • Trade moderated slightly in 2023-24 to USD 24 billion, but exports from India to Australia grew by 14%.
  • From April-November 2024, bilateral trade reached USD 16.3 billion.
• Preferential Import Utilization:
  • Export utilization: 79%
  • Import utilization: 84%
• Sectoral Growth:
  • Textiles, chemicals, and agriculture sectors have seen significant growth.
  • New export products: Gold studded with diamonds, turbojets.
  • India’s imports: Metalliferous ores, cotton, wood products that fuel Indian industries.
• Geopolitical Strengthening:
  • Enhanced relations in forums like Quad, Indo-Pacific Economic Framework (IPEF), Supply Chain Resilience Initiative (SCRI).

Key Features of the Agreement:

• Tariff Reductions:
  • Australian goods: 85% tariff-free access to India (rising to 90% by 2026).
  • Indian goods: 96% tariff-free access to Australia (rising to 100% by 2026).
• Access to Key Markets:
  • India: Access to Australia's fast-growing market.
  • Australia: Access to India's labor-intensive sectors like gems, jewelry, textiles, leather, furniture, food, agriculture.
• Services and IT:
  • 135 sub-sectors covered in services.
  • India gains market access in 103 sub-sectors with Most Favoured Nation (MFN) status in 31.
  • Fast-tracked approval of medicines and elimination of double taxation for India's IT sector.
• Job Creation & Skill Exchange:
  • Expected creation of 1 million jobs in India.
  • Opportunities for Indian yoga teachers, chefs, and 100,000 students with post-study work visas.

Future Prospects:

• Comprehensive Economic Cooperation Agreement (CECA): Builds on ECTA to advance bilateral trade, with 10 formal rounds and ongoing inter-sessional discussions.
• Trade Target: Aim to reach AUD 100 billion in trade by 2030.
• Global Economic Impact: Strengthening the partnership will contribute to a more resilient and dynamic global economy, with deeper economic integration between India and Australia.