Current Affairs 2022: India-Australia Economic Cooperation and Trade Agreement

India-Australia Economic Cooperation and Trade Agreement is India’s first trade agreement after a decade with a developed economy.

India has recently signed a historic trade agreement with Australia called the India-Australia Economic Cooperation and Trade Agreement, which aims at doubling the bilateral trade to 50 billion USD in the next five years and easing border regulations for commodities as well as people. The talks about the agreement between the two nations are pending for a long time, though the negotiations were relaunched in September 2021. It was towards the end of March that the Agreement was signed after a fast-tracked process and dialogue.

What does this Agreement Entail? 

• This is India’s first trade agreement after a decade with a developed economy. This is a free trade agreement, which means that there would be lesser restrictions on imports and exports between the two nations.
• There were eight subject-specific subheads to cover many aspects that were also agreed upon in this bilateral economic cooperation; Trade in Goods and Services, Sanitary and Phytosanitary measures, Movement of Natural Persons, Customs Procedures, Pharmaceutical Products, Rules of Origin, Technical barriers and other areas.
• Australia has offered Most Favoured Nation in 120 sub-sectors like; Health, Education, Business Services, ITES, IT, Audio-visual etc. It has also offered separate quotas for yoga teachers and chefs. This also includes a post-study work visa for Indian students subject to reciprocation. Recognising licensed work or professional services for young professionals is also a part of their offering. 
• India has offered Most Favoured Nation in 31 sub-sectors and open access to the market in 103 sub-sectors. The MFN list of sub-sectors also includes 11 service sectors such as; Communication Services, Business Services, Construction-related Services, etc. 
• A fast track approval system for generic, biosimilar and patented medication have also been agreed upon. 

Benefits of the Trade Agreement

• This Economic Cooperation and Trade Agreement (ECTA) sets out mechanisms to improve and encourage trade relations between the two nations. It also contributes to the strength and stability of the deepening and diversifying relationship that the two countries share. 
• The ECTA also covers the tariff lines that India and Australia deal in. Australia has provided India preferential market access on 100% of its tariff lines, which includes labour-intensive sectors like; Textiles, Agro products, Jewellery, Automobiles and Medical Services. In return, India is offering Australia preferential market access on 70% of its tariff lines. These primarily cover raw materials like coal and wines.
• This agreement opens doors for student-exchange programs, tourists and professionals moving across the borders of the two nations, which will only strengthen ties in the longer run. 
• Like any good ECTA, this will also improve living standards, provide employment opportunities and work towards the welfare of the citizens of both the countries. 
• Easier visas to Australia on a reciprocal basis opens doors for professionals, who have been looking to work abroad in sectors like Rehabilitation Physiotherapy, Sports Management, etc. It even allows yoga instructors and chefs to work in any of the two countries without hassle.
• This ECTA will strengthen the already existing ties between India and Australia. This will culminate in a long-standing trade partnership in the future benefiting both the nations and creating new employment opportunities, educational opportunities and medical care facilities for people from both sides. In conclusion, it will contribute to the welfare of the citizens of the two nations.

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About the author

With a master's degree in environmental science, Priya Sengupta found her true calling in words and stories. A passionate writer, avid reader and a dog parent, she spends her me-time reading Bengali literature and listening to soulful music.

 

 

 

 

 

 

 

 

Note: The views expressed in this article are solely the author’s own and do not reflect/represent those of Shiksha.