India on Saturday inked a historic trade agreement with its trade partner Australia to export more than 95 per cent of its goods to the island nation for free. The Australia-India Economic Cooperation and Trade Agreement, which India called IndAus ECTA, signifying unity, was signed on that day by Indian Commerce Minister Piyush Goyal and Australian Trade Minister Dan Tehan at a virtual ceremony in the presence of Prime Ministers Narendra Modi and Scott were done. Morrison. this is first trade agreement India has made up with a developed economy after more than a decade.
As per the scope of the deal, bilateral trade in goods and services for the two countries is expected to increase from the current $27.5 billion to $45 billion over five years. With the world adopting a one source diversification strategy, Indos ECTA Australia offers good scope as a sourcing option for procuring Indian products. It will also provide new market entry for Indian products and services that are not currently being exported to Australia.
Describing ‘people-to-people’ relations as a key pillar of the relationship between India and Australia, Prime Minister Narendra Modi said, “This agreement will facilitate the exchange of students, professionals and tourists between us, which will enhance these relations.” Will make it stronger.”
Australia is offering zero duty access to India for about 96.4 per cent of exports (by value) from day one. This includes a number of products that currently attract 4-5 per cent customs duty in Australia.
Items that will enjoy duty free export to Australia
Indian exports to Australia mainly consist of consumer and manufactured goods. The major benefit for goods would be in terms of tariff liberalization by the Australian side, benefiting from fast track approvals for pharma products in Australia.
Under the IndAus ECTA, Australia is offering zero fee access to 100% of tariff lines from India. Under the zero duty agreement, 96.4% of the value of Indian exports will get zero duty access immediately, covering 98 per cent of the tariff lines). This means that for these tariff lines, Indian exports will have immediate market access at zero duty from the first day of entry into force of the contract, exports to the following labour-intensive sectors, currently subject to an import duty of 4-5 per cent by Australia. will be subject to Benefit from instant duty free access.
The following items will be covered under the Zero Fee Agreement:
-Most textiles and apparel including bed and bath linens, toilet and kitchen linens, curtains, pillow covers, quilts and comforters, cotton bags, readymade garments, and carpets and flooring.
– some agricultural and fish products,
Leather goods, footwear, furniture and sporting goods
-Jewelry and Gems
Machinery, electrical goods, railway wagons. Engineering items such as flat and value-added iron and steel products, parts, transportation equipment, non-electrical and electrical machinery
-Selected pharmaceutical products, and scientific and medical equipment. This will benefit all Indian units and drugs that have EU/Canada FDA approval.
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