India - Australia Trade Agreement
On April 2, India and Australia signed an Economic Cooperation and Trade Agreement (ECTA). In this agreement, Canberra would provide duty-free access in its market for over 6,000 broad sectors of India. India – Australia agreed to conclude a Free trade agreement(FTA).
The importance of this news is because these negotiations have been going on between the two countries for many years regarding the free trade agreement. FTA means The trade which was engaged in import and export between two countries should be reduced significantly, Due to which the trade between the two countries will increase greatly.
Mr. Narendra Modi (Prime Minister of India) said ” This is a ‘watershed moment’ for our bilateral relations .. on the basis of this agreement, together, we will be able to increase the resilience of supply chains and also contribute to the stability of the indo – pacific region.”
Mr. Scott Morrison(Australian Prime Minister ) said “ This agreement opens a big door into the world’s fastest-growing major economy for Australian farmers, manufacturers, producers and so many more. This is the single largest Australian government investment in our relationship with India, but it won’t be the last and now marks another milestone in that relationship.”
Some Benefits :
- Many small and medium-size IT companies can start or expand their business in Australia.
- This will help Australia as well to outsource the IT project.
- It is beneficial for students as well as the student visa will be turned into a work permit after 2, 3 years.
- The Australian Government has also confirmed post-study work rights for Indian graduates in the science, technology, and engineering sectors.
- In a major relief for Indian IT firms such as Infosys Ltd, Wipro Ltd, Tata Consultancy Services Ltd, and HCL Technologies Ltd, Australia has committed to resolving the long-pending double taxation issue.
- India and Australia have agreed to enable fast-track approval for patented, generic, and biosimilar medicines.
- Tariffs on almonds, lentils, oranges, pears, and strawberries will be reduced, this will improve opportunities for India’s growing food demand.
- India has agreed to reduce the duty on Australian wines and, in turn, got duty free access on Indian wines.
- It will create new opportunities for jobs and businesses in both countries while laying the foundations for a full free trade agreement.
- India has declared a goal of transitioning all new vehicles away from fossil fuels to electric by 2030 and Australia is home to the world’s second-biggest reserves of lithium, a key component of electric car batteries.“There is a technological shift that the government of India is looking at and Australia is an important element of that.
Although talks for an FTA with Australia have been going on since 2011. How long was it taking to get signed because Australia has all the dairy products and their entry will be easy, and That’s a bit of a problem issue for the Indian farmers, and the small marginal farmers in India are very high and there are 85% farmers in the whole of India and if dairy products start being imported into India, then they will start having problems, So India was a little reluctant here.
India signed the first Free Trade Agreement (FTA) with Sri Lanka in 1998. Likewise, India had FTA’s with : Nepal, Bhutan , Thailand, Singapore, ASEN , Japan , Malaysia.
Overall this agreement is very beneficial for India and Australia.