As the India-Australia Economic Cooperation and Trade Agreement (ECTA) completes a year on December 29, 2023, India has termed the initial outcomes and bilateral trade in 16 out of the 22 sectors as "promising." The duty cuts agreed upon by India and Australia under the ECTA are slated to be implemented in a phased manner, with the next tranche of duty cuts scheduled to come into effect on January 1, 2024.
India expects lower duties to bring Australian wines to the Indian market as well as boost exports of Indian leather and textiles. NIFT is also slated to sign an MoU with Australia to understand their designs well and expand India's exports.
Additional Secretary with the Commerce Ministry, Rajesh Aggarwal, told CNBC-TV18 that India is already in talks with Australia to boost the ambit of the ECTA to include sectors like critical minerals and automobiles, as well as resolve issues of rules of origin and visas for professionals.
Stating that green shoots are visible on exports from both sides due to the removal of tariffs, Aggarwal said that it's difficult to objectify immediate gains in such long-term economic agreements with lasting ramifications. While pointing out that India got preferential or zero tariffs on 99% of tariff lines due to the ECTA, the Commerce Ministry has assured that it will investigate the reasons behind the surge in gold imports from Australia and will act if the need arises.
India's trade deficit with Australia was down to $5.274 billion between April and November 2023, compared to $8.6 billion in the corresponding period in the previous year when there was no ECTA in place. In the period from April to November 2023, a rise in imports has been noted at 237% for gold, 182% for machine tools, 139% for pulses and 92% for fruits and vegetables.
During the same period, a fall in imports has been recorded at 46% for precious and semi-precious stones and 37% for coal, coke and briquettes. The Commerce Ministry has attributed a fall in the imports of coal, coke and briquettes as the reason behind an overall drop in imports from Australia.
