India-Australia ECTA to 'double bilateral trade' to $45bn
By siliconindia | Thursday, 19 January 2023, 09:13:24 AM IST
The Confederation of Indian Industry (CII) Northern Region on Wednesday organised a business outreach session on sector-wise opportunities and benefits arising out of the India-Australia Economic Cooperation and Trade Agreement (ECTA).
The session aimed to brief the industry on the gains for the Indian industry arising out of this Free Trade Agreement (FTA).
Tapan Mazumder, Additional Director General of Foreign Trade, Department of Commerce, Union Ministry of Commerce and Industry, said the major boost for India would be in its labour-intensive sectors, which are currently subject to import duty of 4-5 per cent by Australia.
"The Department of Commerce is having talks with the Australian government for bringing in investments in clean air technology, mining, education and research and development. The warehousing systems in Australia can be used as a gateway to New Zealand, Fiji and Papua New Guinea where Indian presence is miniscule," said Mazumder.
Further, he urged the CII and the industry to work together and give more information to the Department of Commerce so that the bilateral relationship between India and Australia can be strengthened.
P.J. Singh, Vice Chairman, CII Punjab State Council, said the implementation of the ECTA between India and Australia has the potential to double bilateral trade in goods and services to $45 billion in five years.
Congratulating the Prime Ministers of the two countries for the quick conclusion of the agreement, Singh noted zero-duty access to Australia's market is available to India presently with the ECTA entering into force on December 29, 2022.
Australia will provide zero-duty access to India for 100 per cent of its tariff lines (98.3 per cent tariff lines from day one and the remaining 1.7 per cent in a phased manner in five years).
This is expected to lead to $10 billion jump in India's merchandise exports by 2026-27 and would help in creating additional 10 lakh jobs in India and more job opportunities in Australia.
Besides providing cheaper raw materials to many sectors, including steel and aluminium from Australia, the ECTA would also facilitate increased investments from Australia and will support Indian manufacturing, said Singh.
Virendra Pal Singh Mongia, Regional Head, EXIM Bank, said Australia and India are increasingly working together as strategic and economic partners. India-Australia ECTA is a ground-breaking agreement that will leverage the industry to capitalize the enormous untapped potential.
The agreement is expected to boost investments, enhance market access, create additional job opportunities, and most importantly strengthen the bilateral ties of two important players in Indo-Pacific region.
About 96 per cent of Australia's exports to India comprised of raw materials and intermediate products, thus the tariff concessions offered by India will allow local and domestic industries to get cheaper raw materials and enhance their competitiveness.
The CII said in a statement that it is also looking forward to various opportunities for trade in services. Australia has made wide ranging commitments in around 135 sub-sectors with most-favoured nation (MFN) status in around 120 sub-sectors.
The major gains are for the Indian IT sector followed by healthcare and education, and service professionals such as yoga teachers and chefs.
The CII expects that the deal would provide large Indian IT companies to increase their involvement in Australian government projects. The deal enables India and Australia to collaborate and develop niche skill sets, provide global digital solutions, and further develop fintech capabilities.
On the other hand, India is making commitments in around 103 service sub-sectors with MFN in 31 sub-sectors.
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