India-Australia free trade agreement to come into force from December 29
A trade agreement between India and Australia will go into effect on December 29, 2022, nearly nine months after the two countries signed it. The agreement has been ratified by India's President. The two countries inked an interim free trade agreement in April called the Economic Cooperation and Trade Agreement (ECTA), which the Australian Parliament endorsed this week.
As part of the agreement, Australia promised to reduce customs duties on 98.3% of traded items and 100% of tariff lines during a five-year timeframe. India will eliminate customs tariffs on 40% of products immediately and on 70% of tariff lines over 10 years. Textiles and apparel, agricultural products, leather, furniture, jewellery, and pharmaceuticals are among the labour-intensive sectors in India that will profit from the elimination of the 5% customs charge. In FY22, India had a trade deficit of US$ 8.5 billion with Australia, with US$ 8.3 billion in exports and US$ 16.8 billion in imports. After the trade agreement goes into effect, bilateral trade is estimated to increase from US$ 25 billion to US$ 45-50 billion in five years.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.