India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA)

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Context

India and Australia have signed the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA).

Must Read: https://www.iasgyan.in/daily-current-affairs/australia-india-relations

Background

Recent years have seen remarkable growth in the trading relationship between India and Australia, fuelled by the many complementarities between the two economies.
Two-way trade in goods and services has grown in value from $13.6 billion in 2007 to $24.3 billion in 2020.
India is the world's largest democracy and is a market of 1.3 billion people. Its youthful population, diversified economy and growth trajectory present significant opportunity for Australian business, including in education, agriculture, energy, resources, tourism, healthcare, financial services, infrastructure, science and innovation, and sport.
Australia and India launched negotiations for a Comprehensive Economic Cooperation Agreement in May 2011. There were nine rounds of negotiations before both countries decided to suspend negotiations in 2016, pending the outcome of other multilateral regional negotiations.
In September 2021, Australia and India formally re-launched CECA negotiations with the intention of concluding an Economic Cooperation and Trade Agreement (AI-ECTA)to swiftly liberalize and deepen bilateral trade in goods and services, and to then use this foundation to resume negotiations on the more ambitious CECA.

Significance of the recently signed Ind-Aus ECTA

Indian exports will benefit from preferential zero duty market access in Australia for 100% of its tariff lines.
This will benefit India’s labour-intensive sectors such as gems and jewellery, textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and automobiles.
On the other hand, India has provided preferential access to Australia on over 70% of its tariff lines, which are primarily raw materials and intermediaries such as coal, mineral ores etc., which are required for our domestic manufacturing industry. Moreover, Australia has also provided additional market access and mobility facility for Indian professionals including chefs and yoga teachers.