India’s overall exports to Australia have experienced a marginal decline in value from January to November, following the implementation of the India-Australia Economic Cooperation and Trade Agreement (ECTA) on December 29, 2022, according to official data. The dip in exports can be attributed to the reduced value of petroleum product exports, which comprise over 50% of India’s total exports to Australia. Data reveals that India exported goods worth $7.23 billion to Australia during this period, down from $7.62 billion in the same timeframe last year. This decline aligns with the global trend of reduced Indian exports due to sluggish demand caused by geopolitical tensions and high inflation.
However, amidst this decline, exports of specific items that received duty concessions have increased. Engineering goods, electronics, apparel, and pharmaceutical exports have seen growth since the implementation of the ECTA. Engineering goods exports increased to $1,280.06 million, pharmaceutical exports reached $422.28 million, and readymade textiles saw a rise to $289.73 million. Indian government officials have highlighted the positive impact of the free trade agreement with Australia, emphasizing the early signs of export growth in sectors benefiting from preferential tariffs.
Rajesh Agarwal, Additional Secretary in the Commerce Ministry, stated that Australia’s foreign direct investments (FDI) in India have spiked from an average of $30-40 million to $300 million this year. Agarwal further revealed that negotiations for expanding the current trade deal are in progress, with upcoming talks scheduled on rules of origin. On the other side, the Australian government disclosed that agricultural exports from Australia to India, including sheep meat, seafood, broad beans, citrus, and almonds, have grown by 50% since the trade agreement came into effect.
Reacting to the positive developments, Don Farrell, the Australian Minister for Trade and Tourism, expressed his satisfaction with the agreement’s impacts and called for further investment in the bilateral trade relationship with India. The aim is to elevate the existing trade agreement to new heights.
All in all, while India’s overall exports to Australia have experienced a slight decline, specific sectors have witnessed significant growth after the implementation of the ECTA. The Indian government is actively working to expand the trade deal, and Australia is looking forward to strengthening the trade relationship with India, focusing on sectors such as agriculture, manufacturing, and education.
