In news– Recently, India and Australia have announced that they are set to conclude an interim trade agreement in March and a Comprehensive Economic Cooperation Agreement (CECA) 12-18 months thereafter.
About the free trade agreement-
- As per Indian Commerce Minister, the interim agreement set to be announced in about 30 days will cover most areas of interest for both countries including goods, services, rules of origin, sanitary and phytosanitary measures and customs procedures.
- An interim or early harvest trade agreement is used to liberalize tariffs on the trade of certain goods between two countries or trading blocs before a comprehensive FTA (Free Trade Agreement) is concluded.
- Bilateral trade between the two countries stood at about $12.5 billion in FY21 and has already surpassed $17.7 billion in the first 10 months of FY22.
- India has imported merchandise worth about $12.1 billion from Australia in the first 10 months of the fiscal and has exported merchandise worth $5.6 billion in the same period.
- Key imports from Australia include coal, gold and LNG while key exports to the country from India include diesel, petrol and gems and jewellery.
- The agreement with Australia was set to bring opportunities across sectors including mining, pharmaceuticals, health, education, renewables, railways, gems and jewellery, tourism, defence and textiles.
- India is also likely to seek easier visa access for both students and professionals visiting Australia.
- Australia is likely to seek market access for wines and agricultural products which are not produced on a large scale in India.
- India and Australia are both members of the Quad (Quadrilateral Security Dialogue) along with the US and Japan.
- Australia already had FTAs with both the US and Japan.
- India is currently in the process of negotiating FTAs with the UAE, the UK, Canada, the EU and Israel, besides Australia.
- India is also looking to complete an early harvest agreement with the UAE and the UK in the first half of 2022.