The free trade agreement between India and Australia has come into effect from December 29, 2022. This move will help both countries increase bilateral commerce to USD 45-50 billion in the next five years.
Don Farrell, Australian Minister for Trade and Tourism said that the govt. welcomes the new agreement and has completed all the domestic requirements for the implementation of the Australia-India Economic Cooperation and Trade Agreement (ECTA). “It is the dawn of the new year”, said Piyush Goyal, Commerce and Industry Minister. He further added that India and Australia have come together for a long-lasting partnership. This agreement will allow duty-free access to Indian exporters of over 6000 broad sectors that include textiles, leather, furniture, machinery, and jewelry in the Australian market.
As per the agreement, Australia is providing zero-duty access to India from day one for about 96.4% of exports and this applies to many products that now attract 4 to 5% customs duty in Australia.
The agreement delivers a dual bonus of two tariff cuts in a quick sequence, one by Dec 29, 2022, and the other on January 1, 2023. The ECTA will help save Australian exporters over $ 2 billion a year in tariffs, while consumers and businesses will save $ 500 million in tariffs on imports of finished goods. India’s tariff commitment to Australia will open access for exporters of products that include pharma, cosmetics, lentils, seafood, horticulture, and wine.
The Australian supplier will certainly benefit from this agreement as they get full or partial access across over 85 Indian services. Australian suppliers will get the highest standard of treatment when compared to other or future trade agreement partners. The Govt. of Australia is looking at expanding opportunities and cooperation in more areas like digital trade apart from what is already discussed and finalized. As India is one of the world’s fastest-growing economies, Australia is looking at elevating its relationship in widespread areas.