Australia and India Poised to Unlock Trade Potential with Bilateral Free Trade Agreement

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Australia and India are encouraged to adopt an independent foreign policy and sign a bilateral Australia-India free trade agreement (FTA) to unlock trade potential and promote economic growth. The revival of CECA negotiations and India’s ‘Act East’ policy are significant, given SAARC’s dysfunctionality. 

The ECTA, signed in April 2022, grants Australian producers access to the Indian market and promotes trade, investment, and innovation. Strengthening the partnership in the Indo-Pacific region will diversify exports, promote free trade, and enhance connectivity. 

FTA negotiations are underway, focusing on education, tourism, infrastructure, and technology sectors. The FTA will provide enhanced market access, economic cooperation, and regional integration with SAARC countries

“ECTA helps secure access to the fast-growing Indian market of over 1.4 billion people and gives Australian businesses opportunities for trade diversification. For more information, refer to the outcomes documents and official text of the Australia-India Economic Cooperation and Trade Agreement,” per the Department of Foreign Affairs and Trade.

It eliminates tariffs on Australian and Indian products, benefiting the tourism and higher education sectors. 

The FTA can give Australia access to India’s youth market while Australia can support India’s youth demographic dividend. Balancing security concerns, economic reliance on China, and sensitive trade areas is crucial. 

India’s non-participation in RCEP is due to trade deficits and market access disagreements with China. Australia and India must collaborate effectively without causing friction with RCEP countries. Market access for Australian agricultural goods in India will be challenging due to India’s focus on self-sufficiency. 

Efforts can be made to export agricultural goods outside India’s seasonal crop period. India has the potential to surpass China as Australia’s largest trading partner, but India’s trade deficit reached a record high in 2022. The impact on small businesses and addressing risks like bribery and corruption need further consideration. 

India’s demand for high-value food and potential as a supply chain and manufacturing hub can benefit Australia. Accelerating FTA negotiations will strengthen the Australia-India relationship.

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