India and Australia’s long-awaited FTA (Free Trade Agreement) has been ratified by the Australian parliament; Australian PM Anthony Albanese announced.
The Economic Cooperation and Trade Agreement, outlining the structure of the FTA, was signed by the outgoing PM Scott Morrison. Within a month of taking over the office, PM Albanese had it authorized by the Australian lawmaker. He has also announced his intentions of visiting India soon; "I also met with Prime Minister Modi of India, where we discussed the finalization of the closer economic cooperation agreement between Australia and India, which we regard as being very important for expanding the economic relationship between Australia and India. I will visit India in March," said Albanese while addressing the presser on Wednesday. "We'll take a business delegation to India. And that will be an important visit and an upgrade in the relationship that we have between our two nations," he added.
The Australian Trade Minister also stressed the importance the FTA holds in the Australian service sector and working professionals, by giving them access to almost a billion new customers. "The quality of this Agreement, in terms of market access and opportunity for Australian businesses, demonstrates India's commitment to our bilateral economic partnership," Farrell said in a statement, "India presents unparalleled growth opportunities for Australian business across a range of sectors, from food and agriculture, technology and green energy, to health and education services," he added.
The FTA will impact bilateral trade between the two countries, which is expected to rise from $31 billion to $50 billion in five years. The deal also comes with The Most Favored Nation (MFN) status for each other in more than 120 sectors. It will insure 0 duty on 98.3% of Australian tariff lines for Indian products and 0 duty on 90 % of Australian exports to India. There are also provisions to avoid double taxation on Indian IT firms setting shop down under. Furthermore, post-study work visas for both Indian and Australian students will become easily accessible.
Moreover, the Ind-Aus. ECTA is likely to make coal, a crucial input for India’s energy needs and its industrial growth, available at competitive prices. Indeed, duty-free imports of Australian raw materials such as copper, nickel, aluminum, manganese, wool, hide and skins, etc., would boost the competitiveness of the Indian industry, thus creating enormous job opportunities. Also, the signing of this trade deal would work a long way in establishing India’s commitment to having mutually beneficial trade agreements as it looks to strike similar deals with the U.K., Canada, and E.U.
For Australia, it also adds to its consistent efforts in establishing closer ties with India at all levels amid an increasingly aggressive China. With 33% of Australian exports committed to the Dragon, the deal offers a chance to increase its 3.7% exports to India and offer a much-needed diversification for Aussie trade. Already engaging on various geopolitical forums such as the four-nation Quad, the trilateral Supply Chain Resilience Initiative, and the Indo-Pacific Economic Forum (IPEF), the FTA also commits both countries at a geo-economic level. It, therefore, presents an example for anyone, who wonders what a “China plus 1” policy looks like, in the face of the increasing difficulties countries are having in dealing with Chinese monopoly and dodgy supply lines.
That being said, in a nascent stage, the world will watch how this deal unfolds for Indo-Pacific partners and will put its finger on what to expect from an FTA involving India.
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