29-Dec-2022: India Australia Economic and Cooperation Trade Agreement comes into force
India has achieved the unique distinction of operationalizing two Trade Agreements this year. After the entry into force of India UAE Comprehensive Economic Partnership Agreement on May 1 earlier this year, the India-Australia Economic Cooperation and Trade Agreement (#IndAusECTA) has come into effect from today, i.e., December 29, 2022. The ECTA was signed on April 2, 2022, ratified on November 21, written notifications were exchanged on November 29 and after 30 days, the Agreement has come into force today.
Indian goods on all tariff lines to get access to Australian market with zero customs duty
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.
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.
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.
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.
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. The agreement is also likely to increase investment opportunities, promote exports, create significant additional employment and facilitate strong bonding between the two countries.
Australia is an important strategic partner of India. They are also part of the four nation QUAD, Trilateral Supply Chain Initiative and the Indo-Pacific Economic Forum (IPEF).
All the necessary notifications required for entry into force of Ind-Aus ECTA on 29.12.2022 have been issued by Department of Revenue and the Directorate General of Foreign Trade in the Department of Commerce.
A few shipments have been given preferential access certificates by the Commerce and Industry Minister Piyush Goyal, in Mumbai today.
16-Dec-2022: India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) to come into force on 29 December 2022
India and Australia have signed the India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) on 2 April,2022, which will come into force on 29.12.2022.
Indian exports will benefit from preferential zero duty market access in Australia for 100% of its tariff lines, 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, 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.
30-Nov-2022: Ind-AUS ECTA to enter into force on 29 December 2022
Post signing of India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) on 2 April 2022 and completion of the ratification processes and the necessary domestic requirements, including internal legal procedures, India and Australia has exchanged written notifications. The Agreement will enter into force 30 days after this exchange of written notification between India and Australia in accordance with Article 14.7 of the Agreement. Accordingly, the Agreement will come into effect from 29 December 2022.
The India-Australia ECTA and the provisions thereof which has been arrived at after extensive consultations with all relevant stakeholders, will further cement the already deep, close and strategic relations between the two countries and will significantly enhance bilateral trade in goods and services, create new employment opportunities, raise living standards, and improve the general welfare of the peoples of the two countries.
Industries, businesses, students, professionals etc. in both the sides are eager to avail the opportunities arising through this agreement. It will also promote people to people contact between the two democracies. Duties on 100 percent tariff lines are to be eliminated by Australia under the agreement. It is expected that with this agreement, the total bilateral trade will cross US$ 45-50 bn in 5 years from existing US$ 31 bn. Both the countries are complementarities in its trade opportunities. Hence it will help in resilient supply chain wherein cheaper raw materials and intermediate products from Australia will be made available to make our finished product competitive.
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 (1.5-4 years) under the ECTA. The agreement is also likely to increase investment opportunities, promote exports, create significant additional employment and facilitate strong bonding between the two countries.
Australia is an important strategic partner of India. They are also part of the four nation QUAD, Trilateral Supply Chain Initiative and the Indo-Pacific Economic Forum (IPEF). ECTA will open a new chapter on India-Australia Comprehensive Economic Partnership between two vibrant economies with shared interest and trade complementarities. The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries.
22-Nov-2022: Australian parliament approves free trade agreement with India
The Prime Minister, Shri Narendra Modi has thanked Australian PM, Anthony Albanese as Australian parliament approves free trade agreement with India.
Shri Modi also said that Economic Cooperation and Trade Agreement (ECTA) will be greatly welcomed by our business communities, and will further strengthen the India-Australia Comprehensive Strategic Partnership.
In response to a tweet by Australian PM, Anthony Albanese, the Prime Minister tweeted;
"Thank you PM @AlboMP! The entry into force of IndAus ECTA will be greatly welcomed by our business communities, and will further strengthen the India-Australia Comprehensive Strategic Partnership."
22-Nov-2022: Duties on 100 percent tariff lines to be eliminated by Australia under the landmark India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA): Shri Piyush Goyal
Union Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Shri Piyush Goyal said that duties on 100 percent tariff lines would be eliminated by Australia under the landmark India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA). He was addressing a press conference on the ECTA following the approval of the Agreement by the Australian Parliament today.
Minister expressed his gratitude to Prime Minister Shri Narendra Modi and said that the ECTA was made possible because of the bond that he had built with the leadership in Australia cutting across party lines.
Shri Goyal said that the ECTA would give a big boost to several sectors of the economy, especially textiles, gems and jewellery and pharmaceuticals. It may be noted that 10 lakh jobs are estimated to be created as the result of the ECTA. He noted that the Agreement would also open new opportunities for the service sector in India and would immensely benefit students by offering them an opportunity to work in Australia. Annual Visa quota of 1800 is to be instituted for India Yoga teachers and Chefs.
The Minister underscored that the Agreement was finalized after extensive and exhaustive stakeholder consultations and pointed out that it was unanimously accepted and supported by all quarters.
Shri Goyal observed that the Agreement reflected the confidence and trust between the two countries, and India’s growing stature in the world. He said that ECTA would further deepen India’s relationship with Australia, a vibrant democracy which shared several of India’s interests.
IndAus ECTA which was signed on 2 April 2022, is now ready for ratification for its early implementation, with the Ind-Aus ECTA Bill and the DTAA amendment bill being passed by the Australian Parliament today and is being placed before Executive Council to get Royal Assent. The Agreement will enter into force shortly, on a mutually convenient date once both the sides have completed their domestic processes.
Australia is an important strategic partner of India and both the democracies are part of the four nation QUAD, Trilateral Supply Chain Initiative and the Indo-Pacific Economic Forum (IPEF). The trade relationship facilitated through ECTA will open a new chapter on India-Australia Comprehensive Economic Partnership between two vibrant economies with shared interest and trade complementarities. This agreement initiated by the Hon’ble Prime Ministers of both the sides, is the cornerstone of our multi-faceted bilateral relations. 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. This will also connect with more than seven lakhs of Australia’s Indian diaspora, second highest taxpaying diaspora, which makes a significant contribution to Australia’s society and economy.
ECTA provides for an institutional mechanism to encourage and improve trade between the two countries. For the first time, decisions completely based on extensive stakeholder consultations with every industry, Ministries, trade associations etc. unlike the previous FTAs was undertaken. It is expected that with this agreement, the total bilateral trade will cross US$ 45-50 bn in 5 years from existing US$ 31 bn. India’s Merchandise Exports is likely to increase by 10 billion by 2026-27. Moreover, since the labour-intensive sectors will be benefitted, it is expected to create an additional employment of at least 10 lakhs jobs in India, create ample opportunities for investment, promotion of start-ups. Similarly, it would provide enhanced job opportunities for Indians in Australia and increased remittance flows to India.
Around 96% of Australia’s exports are raw materials and intermediate products which will allow many Indian industries to get cheaper raw materials and make them competitive. Investments will help increasing presence of higher value products of advanced technology, thereby promoting vertical Movement in the value chain (Engineering, Electronics, Pharmaceuticals & Medical devices). Another major gain is in Pharmaceuticals sector, where Drugs approved in other developed jurisdiction will get fast track approval for patented, generic and biosimilar medicines.
As regards trade in services, Australia has offered wide ranging commitments in around 135 sub sectors. which cover key areas of India’s interest like IT, ITES, Business services, Health, Education, and Audio visual. Some of the key offers from Australia in the services space include: Quota for chefs and yoga teachers; Post study work visa of 2-4 years for Indian students on reciprocal basis; mutual recognition of Professional Services and Other licensed/regulated Occupations; and Work & Holiday visa arrangement for young professionals. Moreover, the long pending issue under Double taxation related to IT/ITES has been resolved under this Agreement which will provide a financial savings of more than US$ 200 million per year as per the estimates received from the Industry Associations.
As part of the commitments under ECTA, for the Comprehensive Ind-Aus ECTA, Chief Negotiators from both the sides will have a meeting shortly to finalise the Scoping document.
In a nutshell, the India-Australia ECTA will further cement the already deep, close and strategic relations between the two countries and will significantly enhance bilateral trade in goods and services, create new employment opportunities, raise living standards, and improve the general welfare of the peoples of the two countries.
1-Nov-2022: Shri Piyush Goyal and H.E. Don Farrell, Minister of Trade and Tourism of Australia discuss IndAus ECTA (India-Australia Economic Cooperation and Trade Agreement)
Union Minister of Commerce & Industry Shri Piyush Goyal in a virtual meeting with H.E. Don Farrell, Minister of Trade and Tourism, Government of Australia noted that the early implementation of IndAus ECTA is in the best interest of both the countries. Meeting was held to discuss the status of ratification of IndAus ECTA (India-Australia Economic Cooperation and Trade Agreement), its early implementation and to deliberate upon way forward for a comprehensive IndAus ECTA.
During the meeting both the delegations reviewed and appreciated the progress made in ratification of the IndAus ECTA, which was signed on 22nd April, 2022.
The Australian Minister informed that the IndAus ECTA as well as the amendments to the domestic regulation of Australia for resolving the issues related to Double Taxation Avoidance Agreement (DTAA) had been introduced in the Australia Parliament and likely to be ratified shortly after the Joint Standing Committee on Treaty submits its report to the Australian Parliament. He further mentioned that the processes related to the ratification of the agreement will be completed in the following weeks.
Both the parties acknowledged the importance of initiating discussions for the comprehensive IndAus ECTA, as agreed under IndAus ECTA signed on 2nd April, 2022.
They agreed to hold the annual Joint Ministerial Commission (JMC) meeting sometime early next year. In the meantime, experts from both the sides will have their first round of discussions, which will lay a roadmap for the Joint Ministerial Commission meeting.
Delegations noted that both nations share a special partnership based on mutual values of pluralistic parliamentary democracies, expanding economic strategic engagement and long-standing people to people ties.
Meeting concluded with both the parties acknowledging the need to redefine their economic relations exploring the opportunities offered in trade and investment.
