Trade Agreement India Australia
Australia and India are on the road to concluding the Comprehensive Economic Cooperation Agreement (ECSC), which is expected to provide a significant boost to investment in both sides and further strengthen bilateral economic relations. Independent models made in 2008 showed that an ECSC between Australia and India could result in a net increase in Australian GDP of $32 billion and India`s GDP of $34 billion over 20 years. The study concluded that resources, agriculture, manufacturing, financial services, software, telecommunications and education are likely to benefit the most from a trade agreement between India and Australia. Since the end of the study, these possibilities have become even clearer and greater. Indian Foreign Minister Subrahmanyam Jaishanka recently revealed Australia`s trade negotiations in an interview with the Foreign Policy Research Group Lowy Institute. In the last round of negotiations, Australia`s agricultural exports were seen as a sensitive issue between the two countries, with democratic calculations by the Bharatiya Janata Party (BJP) playing an important role in preventing agreements. More than half of India`s jobs are related to agriculture, and although the sector is highly inefficient, both in production and distribution – leading to frequent price spikes such as those that have hit the onions recently – no political party has the will to open up the sector to increased competition or even reform, even if the long-term benefits were considerable. This political reality indicates that Australia is unlikely to achieve favourable status for its agricultural products when negotiations resume. In addition to the ECSC, Australia and India are participating in negotiations on the Comprehensive Regional Economic Partnership – a proposed ASEAN-centric free trade area that would initially include the ten ASEAN member states and countries with free trade agreements with ASEAN. Fifteen Asia-Pacific economies signed the RCEP last month, forming the world`s largest free trade bloc, excluding the United States. Jaishankar also said that India and Australia would have “very strong defence relations” and added that he hoped for strong trade cooperation. According to the Department of Foreign Affairs and Trade, trade in goods and services between the two countries increased from $13.6 billion in 2007 to $30.4 billion in 2018.
India has already concluded several free trade agreements, in particular the South Asia Free Trade Agreement (SAFTA), the Comprehensive Agreement between India and ASEAN (CECA), the India-Korea Comprehensive Economic Partnership Agreement (EPA) and the Asian and Japanese EPA.