Business Standard - 02 August 2022
India, Australia may begin comprehensive FTA talks from next month
By Shreya Nandi
Negotiations between India and Australia towards a comprehensive trade agreement are expected to begin from September, with focus on chapters such as digital trade, government procurement, among other areas, said people in the know.
While both nations had signed an interim free trade deal — Economic Cooperation and Trade Agreement (ECTA) — in April, the ratification of the deal may take a few more months due to procedural delays caused by the formation of a new government in Australia.
The interim trade deal (or ECTA) is expected to kick in from November, informed a senior government official. “India and Australia had decided to resume talks on the full-fledged trade deal 75 days after the signing of ECTA. However, the Parliament session of the new government started last week. It will also need approval from a parliamentary committee before the trade deal is ratified. That will take time. We expect the interim trade deal to kick in around November,” the official told Business Standard.
The comprehensive economic cooperation agreement (CECA) will include chapters on government procurement, digital trade, market access for goods and services, as well as product-specific rules.
After signing the interior trade deal with Australia in April, Commerce and Industry Minister Piyush Goyal had told Business Standard that there are many areas of further development between India and Australia.
“Given India’s growing strength in the information technology (IT) sector, the digital world is an area we would like to engage much more with Australia. Then there is sustainability and environment. Our collective fight is to protect the planet from adverse circumstances of climate change. There are many areas where we are going to look for further engagement, such as education, technology, partnerships and other areas where we can work together,” Goyal had said.
Under the interim trade deal, Canberra will provide duty-free access to its market to over 6,000 sectors of India and help in taking bilateral trade to $50 billion in the next five years. The deal will also offer relief to Indian IT companies operating in Australia since Canberra has agreed to amend its domestic laws to stop taxing offshore income of such companies, as part of ECTA.
A trade deal with Australia is crucial since it is among the first developed nations to finalise a trade pact with India. The deal is significant for strategic reasons as well, at a time when India has entered into a trilateral supply-chain resilience initiative (SCRI) arrangement with Australia and Japan.