India-Australia sign trade pact; bilateral trade to reach $45 bn in 5 years

On Saturday, India and Australia signed an economic cooperation and trade agreement (ECTA) under which Canberra will grant duty-free access to over 95% of tariff lines in its market, including textiles, leather, furniture, jewellery, machinery, and some medical items. The agreement will take four months to implement. After more than a decade, India has finally struck a trade pact with a developed economy. In the current fiscal year, Australia is India's 17th largest trading partner, and India is Australia's 9th largest trading partner. In five years, bilateral trade in products and services between the two countries is predicted to increase from US$ 27.5 billion to US$ 45 billion.

India's offer comprises immediate duty removal on 40% of its tariff lines, which account for 85% of Australia's value-added exports to India, as well as the elimination or reduction of tariffs over a 3,5,7, or 10-year period on the remaining 30.3% of its tariff lines. In the services industry, India benefits from reciprocal post-study work visas for Indian students of two to four years, as well as work and holiday visa arrangements for young professionals.

“Post study work visas will provide extended options for working in Australia to eligible Indian graduates, post graduates and STEM (science, technology, engineering and mathematics) specialists,” said Mr. Piyush Goyal Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.