Introduction

• The AI-ECTA was recently given the green light by the Australian parliament. In India, such agreements are approved by the Union Cabinet.
• Both India and Australia are looking forward to implementing the FTA on a mutually agreed date. The agreement was inked by both parties in April 2022.
• The agreement is expected to fortify the India-Australia Comprehensive Strategic Partnership even further.

The Importance of AI-ECTA

Significance for India

• This FTA is the first that India has signed with a major developed country in over ten years.
• As per the agreement, Australia will offer India duty-free access to approximately 96 percent of its exports.
• The agreement is anticipated to be advantageous for a range of industries in India, such as textiles, apparel, agriculture, fisheries, leather, footwear, furniture, sports goods, jewelry, machinery, and electrical goods.

Significance for Australia

• India, being the world’s largest democracy, offers a robust market.
• Australia can tap into a wealth of opportunities in education, agriculture, energy, resources, tourism, healthcare, financial services, infrastructure, science and innovation, and sports, thanks to India’s youthful population, diverse economy, and growth trajectory.

Sectors Primarily Benefiting from the Agreement

• Once in effect, the trade agreement will provide duty-free access to over 6,000 broad sectors of India in the Australian market, including textiles, leather, furniture, jewelry, and machinery.
• Labour-intensive sectors expected to gain significantly include textiles and apparel, select agricultural and fish products, leather, footwear, furniture, sports goods, jewelry, machinery, electrical goods, and railway wagons.
• The Indian pharmaceutical industry, in particular, will benefit from the simplified regulatory processes in Australia.
  • The Australian government has agreed to the Annex on Pharmaceutical Products, which will benefit all Indian pharmaceutical companies and medicines that have received FDA approval in the EU or Canada.
• The ECTA is projected to create an estimated 10 lakh jobs.
  • Increased capacity and investment in textile exports are expected to generate additional employment for 40,000 people per year.

For more information, you can read about the India-Australia Free Trade Agreement.

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