New Delhi: The implementation of the Economic Cooperation and Trade Agreement (ECTA) between India and Australia has the potential to double the bilateral trade in goods and services to $45 billion in five years, said the Confederation of Indian Industry (CII).
Congratulating the Prime Ministers of the two countries for the quick conclusion of the agreement, CII noted that zero-duty access to Australia's market will be available to India immediately as the ECTA enters into force on Thursday.
"Australia and India are increasingly working together as strategic and economic partners. India Australia ECTA is a ground-breaking agreement that will leverage the industry to capitalise the enormous untapped potential. The agreement is expected to boost investments, enhance market access, create additional job opportunities, and most importantly strengthen the bilateral ties of two important players in Indo-Pacific region," Sanjay Budhia, Chairman, CII National committee on EXIM and Managing Director of Patton International Ltd said.
Australia will provide zero-duty access to India for 100 per cent of its tariff lines (98.3 per cent tariff lines from day one and the remaining 1.7 per cent in a phased manner in 5 years). This is expected to lead to $10 billion jump in India's merchandise exports by 2026-27 and would help in creating additional 10 lakh jobs in India and more job opportunities in Australia. Besides providing cheaper raw materials to many sectors from Australia, the ECTA would also facilitate increased investments from Australia and will support Indian manufacturing, said CII.
The major boost for India would be in its labour-intensive sectors, which are currently subject to import duty of 4-5 per cent by Australia, will gain immediate duty-free access, according to CII.
The sectors that would gain immediately are textiles and apparel, leather and footwear, furniture, sports goods, jewellery, machinery, railway wagons and select agricultural and marine products. CII noted that substantial gains are expected in pharmaceuticals whereby drugs approved in other developed jurisdiction will get approval in Australia much faster. India, on the other hand, is providing zero-duty access to Australia for 70.3 per cent of its tariff lines (40.3 per cent tariff lines from day one and the remaining 30 per cent in a phased manner). India has offered zero duty access on coal, alumina calcined, manganese ore, copper concentrates, bauxite, sheep meat, rock lobster, macadamia nuts, cherries, and wool.
About 96 per cent of Australia's exports to India comprised of raw materials and intermediate products, thus the tariff concessions offered by India will allow domestic industries to get cheaper raw materials and enhance their competitiveness.