Introduction
 India and Australia have signed a historic interim Economic
Cooperation and Trade Agreement (INDAUS ECTA), which will give a fillip
to India’s exports in the textiles, leather, gems, and jewelry sector Down
Under.
 For India, the ECTA with Australia is the first agreement with a large
developed economy of the world 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).
 The two sides will be negotiating for a full-fledged Comprehensive
Economic Cooperation Agreement (CECA).
 CECA is mainly concerned with tariff reductions and the elimination of
all items that are considered to be listed tariff rate quota items.
Benefits of Economic Cooperation
The economic cooperation between Australia and India
has the potential to bring about significant benefits for
both nations. For Australia, it could mean access to a
large and growing market in India, which is expected to
become the world's third-largest economy by 2030.
For India, increased cooperation with Australia could
mean access to advanced technology and expertise in
areas such as mining, agriculture, and renewable energy.
Benefits For Australia
1. Increased access to the Indian market: India is a rapidly growing market with a large consumer base.
An FTA could help reduce trade barriers and increase access for Australian exporters to the Indian
market, potentially leading to increased exports and greater market diversification.
2. Improved competitiveness: An FTA could make Australian exports more competitive in the Indian
market by reducing tariffs, lowering costs, and increasing market access for Australian businesses.
3. Enhanced economic ties: Closer economic ties between India and Australia could lead to increased
investment flows and stronger business relationships, benefiting both countries economies.
4. Access to skilled Indian workers: An FTA could facilitate the movement of skilled professionals between
the two countries, helping Australian businesses to access talent and expertise in areas such as IT,
engineering, and healthcare.
5. Strengthened geopolitical ties: An FTA could help to strengthen the strategic relationship between
India and Australia, creating a stronger partnership between the two countries on economic, political,
and security issues in the region.
Benefits For India
1. Increase in bilateral trade: An FTA could lead to a significant increase in bilateral trade between India
and Australia by reducing or eliminating tariffs and other trade barriers on goods and services traded
between the two countries. This could create new opportunities for Indian businesses to export their
products and services to Australia and vice versa.
2. Access to new markets: An FTA could give Indian businesses better access to the Australian market,
which is relatively small but wealthy and developed. This could provide opportunities for Indian
companies to expand their customer base and increase their revenue.
3. Attracting foreign investment: An FTA could make India a more attractive destination for Australian
businesses looking to invest in India. This could bring in new foreign direct investment (FDI) into India,
which could help create jobs, transfer technology and expertise, and stimulate economic growth.
4. Improved standards: An FTA could lead to the adoption of higher standards for products and services
traded between India and Australia. This could help improve the quality of Indian exports and make
them more competitive in international markets.
Significance of the Trade
The Australia-India Economic Cooperation Trade
Agreement will remove tariff barriers and provide
cheaper raw materials to India, changing perceptions of
India as 'protectionist' and paving the way for stronger
Indo-Pacific economic ties. This will lead to increased
exports and a stronger Indo-Pacific economic
architecture.
Preferential tariffs cut-off
Tariffs on sheep meat, wool, seafood, infant formula,
barley, oats and lentils, nuts, fruit and vegetables, wine,
and resources will be eliminated. Sheep Meat, Wool,
Seafood, Infant formula, Barley, Oats and lentils, Nuts, Fruit
and Vegetables, Wine, and Resources will also be
eliminated.