India and Australia have witnessed a remarkable surge in their trade relationship, transforming the global trade landscape. According to a recent study conducted by India Exim Bank, the trade volume between the two nations has escalated from a mere $15.6 million a decade ago to an impressive $27.8 billion. This surge can be attributed to the strengthening trade relations and the Economic Cooperation and Trade Agreement (ECTA) that came into force on December 29, 2022.
The study highlighted that approximately 96% of India’s imports from Australia comprise raw materials and intermediate goods, with coal constituting a significant portion. Surprisingly, India’s exports to Australia, on the other hand, consist predominantly of finished consumer goods. Recognizing the immense potential for closer economic ties, the study recommended transforming the ECTA into a Comprehensive Economic Cooperation Agreement (CECA).
Under the proposed CECA, the study suggested several areas for India-Australia cooperation, including support for small and medium enterprises, promotion of digital trade, trading of geographical indication certified goods, settling trade payments in local currencies, strategic alliances for sourcing critical minerals, and partnerships in agri-technology and renewable energy. This comprehensive agreement would take their economic relationship to new heights.
The study’s release occurred during the Asian Exim Bank Forum (AEBF) annual meeting in Sydney, where India Exim Bank’s managing director, Harsha Bangari, and Export Finance Australia’s CEO, John Hopkins, presented the findings. The Export-Import Bank of India created AEBF as a platform for Asian Export Credit Agencies (ECAs) to exchange vital information and nurture trade bonds. With the strengthening ties between India and Australia, it is evident that the global trade landscape will significantly transform in the years to come.
