India-Australia ECTA operational, will benefit significant Indian exports with zero duty market access for 100% tariff lines: Dr A Sakthivel, President, FIEO
India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA), which has come into force today 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 Dr 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 Prime Minister, Narendra Modi and the Commerce & Industry Minister, 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.
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.
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.