After successfully concluding a preliminary free trade agreement (FTA) last year, India and Australia have begun discussions to further strengthen their bilateral ties. These discussions focus on several areas of interest, including digital trade, micro, small, and medium enterprises (MSMEs), traditional knowledge, labor, and sports.
Seventh Round of Talks
The seventh round of talks took place on October 20, where both parties agreed to pursue negotiations on five tracks and 14 new areas. These areas include digital trade, government procurement, MSMEs, traditional knowledge, sports, gender, environment, innovations, space, labor, and competition policy.
Convergence on Common Interests
While both India and Australia have identified potential areas of cooperation, they will ultimately converge on areas of common interest to facilitate the negotiations further. The tracks that have seen significant progress include remaining goods, services, digital trade, government procurement, and product-specific rules of origin.
Trade Figures
According to official data from the commerce ministry, India’s exports to Australia increased by 17% to $4.9 billion in the first six months of 2023-24. However, imports saw a decline of 24.6% to $8.3 billion during the same period. India’s key exports to Australia consist of petroleum products, pharmaceuticals, iron and steel products, electrical machinery, and garments. Meanwhile, its main imports include coal, gold, iron ore, pulses, and minerals.
Expanding Economic Cooperation
Following the operationalization of the Economic Cooperation and Trade Agreement (ECTA) with Australia in December of last year, both countries have agreed to pursue a wider deal, known as the Comprehensive Economic Cooperation Agreement (CECA). The goal is to conclude CECA by the end of this year, as stated by Prime Minister Narendra Modi and his Australian counterpart Anthony Albanese during Modi’s visit to Australia in May.
Expanding Opportunities
The comprehensive FTA between India and Australia is expected to take economic ties to the next level. Australia is anticipated to provide a steady supply of critical minerals, such as lithium and cobalt, without any disruptions. However, challenges remain, including Australia’s demand for greater access to India’s market for its wines and agricultural products.
Conclusion
As India and Australia continue their discussions and negotiations, the expanding scope of the ECTA demonstrates the mutual benefits and significant potential for growth. The comprehensive FTA will further strengthen economic ties and establish a strategic partnership between both countries.
