Economy
India, Australia set to expand trade pact, focus on e-commerce
Summary
- The countries plan to expand the Economic Cooperation and Trade Agreement into a broader trade pact, adding areas like e-commerce, intellectual property, sustainability, and digital trade.
The upcoming 11th round of the bilateral Comprehensive Economic Cooperation Agreement (Ceca) between India and Australia, to be held in November, may include discussions on e-commerce, with the Canberra-based government likely to seek more concessions under its tariff lines on agricultural and dairy products, base metal and steel, and other products, two people aware of the matter said.
Under the Economic Cooperation and Trade Agreement (Ecta), Australia eliminated tariffs on all products while India did so for only 70% of tariff lines. "So far, the talks have been progressive with both sides willing to increase bilateral trade with the aim to reach the A$100 billion mark by 2030," the first person mentioned above said, requesting anonymity.
A$100 billion translates to about $67 billion.
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"The upcoming talks could see discussions on new sectors like e-commerce, and negotiations (by Australia) on further concessions on the tariff lines," the person added.
A tariff line is a product listed in a country's tariff schedule and identified by a system of code numbers.
India and Australia are progressing toward a more comprehensive trade pact through their two-phase Comprehensive Economic Cooperation Agreement (Ceca).
The initial phase, known as the Economic Cooperation and Trade Agreement (Ecta), was signed on 2 April 2022, and came into effect on 29 December 2022.
The Ecta addresses key areas such as trade in goods and services, rules of origin, dispute resolution mechanisms, sanitary and phytosanitary standards, and technical trade barriers.
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In the second phase, the two nations seek to expand Ecta into the broader Ceca, aiming to deepen economic ties and enhance bilateral cooperation.
Australia and India are working towards an ambitious Comprehensive Economic Cooperation Agreement, which will build on our Economic Cooperation and Trade Agreement, signed in 2022. Ceca will add further goods and services market access and new areas of cooperation, a spokesperson for the Australian High Commission said. The Commerce & Industry minister Piyush Goyal met Australia’s Trade and Tourism minister Senator Don Farrell recently in Adelaide, where the ministers had productive discussions on the road to concluding Ceca, increased two-way trade under Ecta, and on our broader economic and trade cooperation, the spokesperson added.
India and Australia plan to expand Ecta into a broader trade pact, adding areas like e-commerce, intellectual property, sustainability, and digital trade, said Ajay Srivastava, former India Trade Services official and founder of economic think tank Global Trade Research Initiative (GTRI).
"Australia is expected to push for tariff concessions on over 90% of tariff lines. While Australia eliminated tariffs on all products under Ecta, India did so for only 70% of tariff lines, as over 50% of Indian products already enter Australia tariff-free without an FTA," Srivastava said.
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“Australia will also seek more concessions on wine imports. Additionally, both countries will finalise Product Specific Rules (PSR) under the rules of origin chapter," he added. PSRs are detailed rules, negotiated at product level and limit the use of third-country imports for the making of a product being exported under tariff concessions.
During FY24, in value terms, India's imports from Australia were $16.2 billion, while exports were almost $8 billion, compared to $19 billion in imports and nearly $7 billion in exports in the previous fiscal.
