FIEO | 03 Jan, 2023
India-Australia
Economic Cooperation and Trade Agreement (Ind-Aus ECTA), which has come
into force recently will benefit Indian exports from preferential duty
market access in Australia for 98.3% of its tariff lines which will
further deepen from 1st January, 2023, just after 3 days, which will
benefit India’s labour-intensive sectors such as gems and jewellery,
textiles, leather, footwear, furniture, food and agricultural products,
engineering products, medical devices, automobiles and specified pharma
products, said A Sakthivel, President, FIEO.
On the other hand, India
has provided preferential access to Australia on over 70% of its tariff
lines, covering 90% of the value of Australia’s exports to Indi, which
are primarily raw materials like coal, copper, nickel, aluminium,
manganese, wool, hides & skin, which will impart competitiveness to
our manufacturing and exports added Dr Sakthivel.
In the First year, around 96.1% of India's exports to Australia will be
duty-free, starting December 29, 2022 and 260 tariff lines pertaining to
Beverages, spirits and vinegar (Chapter 22), Tobacco products (Chapter
24), Mineral fuels (Chapter 27), Organic chemicals (Chapter 29) and
Soap, organic surface-active agents etc (Chapter 34), Miscellaneous
chemical products (Chapter 38), Iron and steel (Chapter 72), Article of
Iron & Steel (Chapter 73), Aluminum products (Chapter 76) and
Medical devices & equipments (Chapter 90) will get preferential duty
benefits from 29.12.2022, which will be further reduced by about 20% of
MFN tariff from 1.1.2023. Iron & Steel and article of Iron &
Steel will face a 4% customs duty against a normal tariff of 5% while
imported from India into Australia from 29th Dec, 2022 till 31st Dec,
2022, which will be reduced to 3% from 1.1.2023.
Besides, pharmaceutical sector will be getting expeditious approval as
many of such drugs already have approval in the US/UK/EU/Canada/Japan,
which will help to increase our share in a market of over US$ 13
billion.
Moreover, Australia has also provided additional market access and
mobility facility for Indian professionals including chefs and yoga
teachers. Services has got the best ever treatment in any agreement as
Australia has made commitments in around 135 sub-sectors with MFN in
around 120 sectors.
Post study work visas ranging from 18 months to 4
years will benefit over 1 lakh Indian students. The commitment to pursue
Mutual Recognition Agreement (MRA) in next 12 months will greatly
benefit the professionals on both sides.
FIEO Chief thanked the Hon’ble Prime Minister, Shri Narendra Modi and
the Hon’ble Commerce & Industry Minister, Shri Piyush Goyal for
cementing the India-Australia Economic Cooperation and Trade Agreement
(ECTA) in a record time.
The agreement, which was ratified by Australian
Parliament on November 15, 2022, is a milestone in India Australia
relationship, which is warm and vibrant backed by mutual cooperation,
trust and common interest, reiterated Dr Sakthivel. The President, FIEO,
said that the ECTA will pave the way for a Comprehensive Economic
Cooperation Agreement, which will further expand the relationship
covering new areas of partnership.
The FIEO
President also added that it is remarkable that in a very short span of
time India has carved out two important partnership agreements with UAE
and Australia, which are complementary economies and our important
export markets.
The FIEO Chief said that India’s goods exports to Australia will reach US$
15 billion by 2025 from US$ 6.9 billion in 2021 taking full advantage of
ECTA, while services should move to US$ 10 billion by 2025 from US$ 3.9
billion (provisional). Dr Sakthivel exuded confidence that the
bilateral trade between the two countries will cross US$ 50 billion mark
much before the target set to achieve the same.