India-Australia ECTA comes into force from today

After the entry into force of India-UAE Comprehensive Economic Partnership Agreement (CEPA) on May 1 earlier this year, the India-Australia Economic Cooperation and Trade Agreement (ECTA) has come into effect from today, i.e., December 29, 2022. Written notifications for the ECTA were exchanged on November 29 and after 30 days it has come into force today.

Australia is the largest importer of apparel in the southern hemisphere, and the ECTA would bring a big relief to Indian clothing exporters as it will do away with the 10 per cent customs duty applicable earlier.

After the entry into force of India-UAE Comprehensive Economic Partnership Agreement (CEPA) on May 1 earlier this year, the India-Australia Economic Cooperation and Trade Agreement (ECTA) has come into effect from today, i.e., December 29, 2022. Written notifications for the ECTA were exchanged on November 29 and after 30 days it has come into force today.

“There is a lot of potential for exporting finished goods to Australia, since they hardly manufacture anything, they are largely a raw material and intermediate producing country, we will get cheaper raw materials which will not only make us more competitive globally but also enable us to serve Indian consumers better; enabling us to provide more quality goods at more affordable prices,” Indian commerce and industry minister Piyush Goyal said while addressing industry representatives and media in Mumbai today.

“Australia, which is largely dependent on imports, will benefit hugely, they will soon start seeing a lot more finished goods coming in from India, providing huge amount of work and job opportunities in both goods and services, provided by Indian talent,” Goyal added.

The India-Australia ECTA provides an institutional mechanism to encourage and improve trade between the two countries. It covers almost all the tariff lines dealt by India and Australia.

India will benefit from preferential market access provided by Australia on 100 per cent of its tariff lines, including all the labour-intensive sectors of export interest to India like textiles, leather and footwear.

On the other hand, India will be offering preferential access to Australia on over 70 per cent of its tariff lines, including lines of export interest to Australia, which are primarily raw materials and intermediaries.

It is estimated that an additional 10 lakh jobs would be created in India under ECTA. The agreement is also likely to increase investment opportunities, promote exports, create significant additional employment and facilitate strong bonding between the two countries.

Fibre2Fashion News Desk (RKS)