The Ind-Aus ECTA is a game changer to bilateral trade
NEW DELHI : India and Australia have been active trading partners since the beginning of the 18th century. India and Australia enjoy excellent bilateral relations that have undergone positive transformative evolution in recent years. Australia is currently India’s 17th largest trading partner and India is Australia’s 9th largest trading partner. The Economic Cooperation and Trade Agreement (ECTA) with Australia was inked on 2 April 2022 and is India’s first complete trade agreement to be signed with any developed country in a decade. The ECTA has been operationalised w.e.f. 29 December 2022.
In terms of the ECTA, India will be provided preferential zero duty market access in Australia for 100% of its tariff lines covering over 6,000 broad categories of Indian products, which will benefit India’s labour-intensive sectors such as gems & jewellery, textiles, leather, footwear, furniture, food & agricultural products, engineering products, medical devices, automobiles, etc. Further, Australia will be provided preferential access for 70% of its tariff lines in Indian markets, which will mainly include coal, mineral ores, wines, sea foods, etc. The ECTA is expected to enhance the robust trade relationship between the two countries and boost bilateral trade from the existing $31 billion to $45 billion in the next 5 years. Further, the ECTA is estimated to create 10 lakh additional jobs in India.
The India-Australia ECTA not only focuses on merchandise trading but also on trade in services. Australia will be providing Indian service providers market access in approximately 135 sub-sectors which would cover key areas of India’s interest like IT, ITES, business services, health, education, audiovisuals, etc. On the other hand, India will be offering market access to Australia in around 103 sub-sectors which would include business services, communication services, construction & related engineering services, etc.
The India-Australia ECTA is a comprehensive agreement with 14 Chapters covering Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Movement of Natural Persons, Dispute Settlement, etc. Some of the key highlights of the India-Australia ECTA are:
Robust legal framework on technical regulations, standards and conformity assessment procedures to ensure the smooth flow of trade in goods.
Sanitary and phytosanitary measures to protect human, animal and plant life or health and strengthen communication, consultation and cooperation between two nations.
Stringent Rules of Origin for strict monitoring of trade flows between the two nations to prevent circumvention of products from other countries.
Separate detailed Chapter on dispute resolution providing an effective and efficient mechanism for settling disputes concerning the interpretation and application of the agreement.
The Union Government vide notification no:112/2022 – Cus (NT) dated 22 December 2022 has notified the Customs Tariff (Determination of Origin of Goods under the India-Australia Economic Cooperation and Trade Agreement) Rules, 2022, effective from 29 December 2022, which among other things provide:
Origin criteria to be met for claiming preferential treatment under the India-Australia ECTA.
Proforma and minimum information to be included in the Certificate of Origin (CoO), like HS Code, description and quantity of the products, origin criteria, etc.
Certification procedure for the validity of the Certificate of Origin (CoO) and the period for issuance of the Certificate of origin.
Obligations on the part of the exporter or importer with respect to the maintenance of documentation
Procedure to be followed by the importer for claiming preferential treatment at the time of importation of goods.
The India-Australia ECTA is likely to make import of coal and other minerals, such as copper, nickel, aluminium, manganese, etc., available at competitive prices, which would provide a much-needed boost to India’s energy sector and its comprehensive growth. The India–Australia ECTA is a ground-breaking agreement in delivering India’s strategy to adapt to an increasingly complex and fast-changing environment by strengthening the economy through international trade.
The India–Australia ECTA has the potential to promote upward mobility throughout the economic value chain, resulting in hundreds of thousands of job opportunities in both countries. The India-Australia ECTA can also be a valuable tool in the hands of the Indian industry in realising the vision of Atmanirbhar Bharat.