India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) Comes into Force

IndAus ECTA Comes into Force UPSC Relevance

India-Australia Economic Cooperation and Trade Agreement is an important milestone in the India-Australia Relations. India-Australia Relations is also important for UPSC Prelims 2023 and UPSC Mains Exam (GS Paper 2- International Relations).

IndAus ECTA in News

• Prime Minister, Shri Narendra Modi has expressed happiness as India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) comes into force recently.
  • Shri Modi said that it is a watershed moment for our Comprehensive Strategic Partnership.

• The Ind-Aus ECTA provides an institutional mechanism to encourage and improve trade between the two countries. It covers almost all the tariff lines dealt by India and Australia.

Indian Navy participates in Exercise Kakadu hosted by Australia

IndAus ECTA Scope & Features

• Market Access: India will benefit from preferential market access provided by Australia on 100% of its tariff lines, including all the labour-intensive sectors of export interest to India, such as Gems and Jewellery, Textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices and Automobiles.
  • On the other hand, India will be offering preferential access to Australia on over 70% of its tariff lines, including lines of export interest to Australia, which are primarily raw materials and intermediaries such as coal, mineral ores and wines.
• Trade in Services: As regards trade in services, Australia has offered wide-ranging commitments in around 135 sub-sectors and Most Favoured Nation (MFN) status in 120 sub-sectors covering key areas of interest to India.
  • On the other hand, India has offered market access to Australia in around 103 sub-sectors and Most Favoured Nation status in 31 sub-sectors from the 11 broad service sectors such as ‘business services’, ‘communication services’, ‘construction and related engineering services’, and so on.
• On Pharmaceutical Products: Both sides have also agreed to a separate Annex on Pharmaceutical products under this agreement, which will enable fast-track approval for patented, generic and biosimilar medicines.
• Job Creation: It is estimated that an additional 10 lakh jobs would be created in India under ECTA.
  • Indian Yoga teachers and chefs are set to gain with the annual visa quota.
  • Over 1 lakh Indian students would benefit from post-study work visa (for 18 months to 4 years) under the ECTA.
• Significance: The agreement is also likely to increase investment opportunities, promote exports, create significant additional employment and facilitate strong bonding between the two countries.

India Australia ECTA: Salient features

• The India-Australia ECTA is the first trade agreement of India with a developed country after more than a decade.
• The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries, and covers areas like Trade in Goods, Rules of Origin, Trade in Services, Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Pharmaceutical products, among others.
• Ind-Aus ECTA covers the entire gamut of the trade & commercial relations, removing trade barriers & opening a plethora of opportunities in both goods & services.
• Expected that with ECTA, the present bilateral trade for merchandise & services of $ 27.5 bn (2021), may reach a level of about $ 45 to $ 50 Billion in next 5 years.

India Australia relations

• India and Australia enjoy excellent bilateral relations that have undergone transformative evolution in recent years, developing along a positive track, into a friendly partnership.
• The India-Australia Comprehensive Strategic Partnership initiated during the India-Australia Leaders’ Virtual Summit is the cornerstone of the multi-faceted bilateral relations.
• India and Australia have been each other’s important trading partners. Australia is the 17th largest trading partner of India and India is Australia’s 9th largest trading partner.
• India and Australia are partners in the trilateral Supply Chain Resilience Initiative (SCRI) arrangement along with Japan which seeks to enhance the resilience of supply chains in the Indo-Pacific Region.
• Further, India and Australia are also members of the recently formed Quad, also comprising US, and Japan, to further enhance cooperation and develop partnership across several issues of common concerns.

IndAus ECTA: India Australia Economic Cooperation and Trade Agreement

IndAus ECTA: India Australia Economic Cooperation and Trade Agreement

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