The Bilateral Trade Relation Between The Two Countries, Takes Giant Strides As The Economic Cooperation And Trade Agreement (ECTA) Is Penned
In a major global business development, India and Australia have signed the historic Economic Cooperation and Trade Agreement (ECTA) on Saturday through a virtual meeting, in their bid to break the trade barriers and bolster the economic ties. The Indian Trade Minister, Piyush Goyal and his Australian counterpart, Dan Tehan signed the dotted lines, a move which is perceived to change the global trade economy drastically. Both the respective Prime Ministers of the two cricket crazy nations, Narendra Modi and Scott Morrison, were present while this extremely significant pact saw itself being sealed through the final paperwork. Narendra Modi looked elated as he termed this as a “watershed moment” for the Indo-Australia relations. Whereas, Scott Morrison was absolutely ecstatic as he welcomed the move by saying, “this agreement opens a big door into the world’s fastest growing major economy for Australian farmers, manufacturers, producers and so many more” bound for India, valued at $14.8 billion per year. Piyush Goyal, who is slated to visit Australia next week, said: “India-Australia partnership has been going from strength to strength. Our exports to Australia have grown the highest in the last 12 months($6.9 billion). We are looking forward to taking the speed of negotiations forward.”. It’s crystal clear that the two democracies have strong intent to make the bond even stronger, as it found echoes in Morrison’s voice when he spoke to the reporters in Tasmania – “These are never all or nothing deals as far as we’re concerned, we see all of these as the next step and the next step and the next step.”.
Implications Into The Bilateral Trade
This key trade pact is going ease, facilitate and strengthen the bilateral trade relation to a great extent. Goyal, the Minister of Trade to the Indian government, pointed out that this historic ECTA deal would mean a dream run for the bilateral trade, which is likely to scale $45-50 billion from the existing $27 billion. This historic trade pact also paves the way for the much-awaited Comprehensive Economic Partnership Agreement (CEPA) which will fully open the floodgates indicating a total free-trade deal.
Sectors That Would Benefit Most
For the Aussies, this landmark deal writes off tariffs on more than 85% Australian goods exports to India, which include sheep meat, wool, copper, coal, alumina, fresh Australian rock lobster and critical minerals, worth A$12.6 billion, escalating to nearly 91% over 10 years. On the other side, this milestone move will enable 96% of the Indian goods imports from 6,000 broad sectors including textiles, leather, furniture, jewellery and machinery enter Australia completely duty-free.
Cheers! – Warm Welcome For The Australian Wine
The workaholic Indians who have a taste for the exquisite Australian wine, have enough reasons to rejoice regarding this landmark ECTA. For, it has been declared that India will offer tax concessions on Australian wines in a phased manner over a span of ten years. The eight-chapter agreement would reduce the customs duty on the wines from a whopping 150% to up to 25% in ten years down the line. The Australian premier, Morrison highlighted in his press declaration that this deal must make the wine producers in Tasmania more than happy as it opens up a gigantic market for them.
Key Factors That Led To This Massive Development
A close reading of the India-Australia ties will prove that they are natural trade partners. Australia happens to be India’s 17th largest trading partner, whereas New Delhi is ranked at 9th so far as Canberra’s trading partners are concerned. Last year, the cumulative figure for the bilateral trade in goods and services reached the mark of $27.5 billion. Both the parties were trying to pull off this epoch-breaking ECTA for more than a decade. Due to a host of geopolitical reasons, the two nations were desperately searching for sustainable ways to reduce the trade dependency on China. This move seems to have done wonders for both the players as it solidifies their strategic positions as well.
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