The India-Australia Economic Cooperation and Trade Agreement (ECTA) will kick off on December 29, 2022, after nine months the two sides signed a deal and will almost double the bilateral commerce to USD 45-50 billion over the next five years.
This ECTA is a win-win partnership agreement and besides, promoting bilateral relations between the two countries will attract many Australian businesses for company formation in India.
“The (Anthony) Albanese government welcomes confirmation today that the Indian Government has completed its domestic requirements to enable implementation of the Australia-India Economic Cooperation and Trade Agreement (ECTA),” Australian Minister for Trade and Tourism Don Farrell noted in a statement on Wednesday, November 30, 2022.
“This trade agreement will deliver new market access opportunities for Australian businesses and consumers from 29 December 2022,” the official statement added.
The pact, which was first agreed upon on April 2, 2022, would result in duty-free access to Indian exporters of more than 6,000 broad categories of products, primarily from the labor-intensive sectors including textiles and apparel, leather and footwear, furniture, sports goods, jewelry, many engineering products and machinery in the Australian market.
These labor-intensive sectors stand to gain immensely and also include a few agricultural and fish products and electrical goods.
Under the ECTA, Australia will provide zero-duty access to India for about 96.4% of exports, in value terms, from the first day covering several products that attract 4-5% of customs duty in Australia presently.
The Indian goods exported to Australia were valued at USD 8.3 billion and goods imported from Australia were USD 16.75 billion in 2021-22.
Once the ECTA was approved by the Australian parliament, Union Minister of Commerce and Industry Piyush Goyal said that the initial size of bilateral trade between India-Australia can reach a whooping figure, almost USD 45-50 billion in the next 5-6 years.
In a press briefing, Goyal highlighted, “Initial size of bilateral trade between India-Australia Economic Cooperation Trade Agreement (IndAus ECTA) can go up to around USD 45-50 billion in the next 5-6 years.”
Piyush Goyal noted, “It is a landmark moment for Australia and India, would like to congratulate the PMs of India and Australia for achieving this significant milestone today. These are 2 democracies with shared interests on the world stage.”
During the conference, Goyal confirmed that this is the first time in “Australian history” that the country is providing duty-free import on 100% of items. He also said that this is the first Trade Pact with a developed nation after a decade.
Referring to the relationship enjoyed between Indian Prime Minister Narendra Modi and the Australian government, Goyal termed it a “strong bond” and emphasized that this ECTA is a big recognition for India and its growing status and capabilities that the businesses offer to the world both in goods and services.
“The textile sector will benefit. Gem and jewelry sector are also excited as they will be able to sell their high-value jewelry in Australia,” the minister highlighted.
“The wine industry has welcomed this trade. The Indian wine industry will grow. The Indian wine industry would be able to export Indian wine to Australia,” he noted.
He also said that with the India-Australia ECTA now in place, the pharmaceutical industry will also be promoted as medicines have already undergone a stringent and rigorous approval process from the USA. The UK will also have a fast-track mechanism to get regulatory approval in Australia.
This trade agreement will deepen the economic ties between the two countries and provide Indian market access opportunities for Australian businesses and how to register private limited companies in India.