India-Australia free trade agreement has been tabled in Australia’s parliament and is soon to be confirmed, the commerce minister reported on Tuesday. Prior to going into effect, the Australian parliament must ratify the April-signed Economic Cooperation and Trade Agreement (ECTA).
Australia will officially ratify its interim trade agreement with India, agreed on April 2, in the coming weeks, putting an end to months of uncertainty. Such agreements are ratified in India by the Union Cabinet.
The topic was discussed at a video conference between Australia’s Minister of Trade and Tourism Don Farrell and India’s Minister of Commerce and Industry Piyush Goyal. Goyal stated that it is better for both countries if the deal is implemented quickly. According to the ministry, the conference was called to review the pact’s ratification status, its expedited implementation, and the best course of action for a complete IndAus ECTA.
“The Australian Minister informed that the IndAus ECTA as well as the amendments to the domestic regulation of Australia for resolving the issues related to the Double Taxation Avoidance Agreement (DTAA) had been introduced in the Australian Parliament and likely to be ratified shortly after the Joint Standing Committee on Treaty submits its report to the Australian Parliament,” it added.
Following ratification, the agreement will go into effect on a mutually agreed-upon date. He stated that the procedures for ratifying the agreement would be finished in the coming weeks. As stipulated in the ECTA, all sides agreed that it was crucial to start discussing the comprehensive agreement.
They decided that the Joint Ministerial Commission (JMC) meeting would take place once a year. Experts from both sides will hold their initial round of conversations in the meantime, which will serve as a roadmap for the JMC conference.
According to an official statement, “Delegations noted that both nations share a special partnership based on mutual values of pluralistic parliamentary democracies, expanding economic strategic engagement and long-standing people-to-people ties. The meeting concluded with both parties acknowledging the need to redefine their economic relations and exploring the opportunities offered in trade and investment”.
Once the deal is put into effect, more than 6,000 diverse industries from India, including textiles, leather, furniture, jewellery, and machinery, would have duty-free access to the Australian market.
Goyal had earlier stated that the pact will assist increase bilateral trade from the current level of USD 27.5 billion to USD 45-50 billion over the course of the following five years.
According to the agreement, Australia will grant zero-duty access to India starting on day one for around 96.4% of exports (by value). This applies to a wide range of goods that are now subject to a 4%–5% customs charge in Australia.
Textiles and clothing, a few agricultural and marine products, leather goods, furniture, sporting goods, jewellery, machinery, electrical items, and railway waggons are all labour-intensive industries that would greatly benefit.
With the implementation of the agreement, access to Australia will be made simpler for Indian yoga instructors, chefs, students, and STEM (Science, Technology, Engineering, and Mathematics) graduates, while premium Australian wine will be more readily available in Indian shops.
While Delhi is Canberra’s ninth-largest commercial relationship, Australia is India’s 17th-largest trading partner. India’s total 2021–22 imports and exports of goods were USD 16.75 billion and USD 8.3 billion, respectively.
In order to prevent taxation on the offshore revenue of Indian companies providing technical help in Australia, India is calling for an early revision of the rules governing the Double Taxation Avoidance Agreement (DTAA). As part of ECTA, Canberra has agreed to change its domestic legislation to stop taxing such firms’ offshore profits. This will provide relief to Indian IT companies operating in Australia.