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IndAus ECTA: India Australia Economic Cooperation and Trade Agreement


IndAus ECTA: Relevance

  • GS 2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.


IndAus ECTA: Context

  • Recently, Ministry of Commerce & Industry has signed the India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) Australia, thus reflecting the depth of the mutual confidence between the two countries.


India Australia ECTA: Salient features

  • The India-Australia ECTA is the first trade agreement of India with a developed country after more than a decade.
  • The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries, and covers areas like Trade in Goods, Rules of Origin, Trade in Services, Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Pharmaceutical products, among others.
  • Ind-Aus ECTA covers the entire gamut of the trade & commercial relations, removing trade barriers & opening a plethora of opportunities in both goods & services.
  • Expected that with ECTA, the present bilateral trade for merchandise & services of $ 27.5 bn (2021), may reach a level of about $ 45 to $ 50 Billion in next 5 years.


UPSC Current Affairs

Impact of IndAus ECTA

  • It is regarded as a watershed moment for India Australia bilateral relation.
  • Also, the agreement would aim to increase the resilience of supply chains, and also contribute to the stability of the Indo-Pacific region
  • ECTA provides for an institutional mechanism to encourage and improve trade between the two countries.
  • The ECTA between India and Australia covers almost all the tariff lines dealt in by India and Australia respectively.
  • India will benefit from preferential market access provided by Australia on 100% of its tariff lines.
    • This includes all the labour-intensive sectors of export interest to India such as Gems and Jewellery, Textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and Automobiles.
  • On the other hand, India will be offering preferential access to Australia on over 70% of its tariff lines, including lines of export interest to Australia which are primarily raw materials and intermediaries such as coal, mineral ores and wines etc.
  • It is expected to create new employment opportunities, raise living standards & enhance the overall welfare of the peoples of both the countries. Additional employment generation is expected to be 10 lakhs within the next 5 years.


IndAus ECTA timeline

  • The negotiations for India-Australia ECTA were formally re-launched on 30 September 2021 and concluded on a fast-track basis by the end of March 2022.


UPSC Current Affairs


India Australia relations

  • India and Australia enjoy excellent bilateral relations that have undergone transformative evolution in recent years, developing along a positive track, into a friendly partnership.
  • The India-Australia Comprehensive Strategic Partnership initiated during the India-Australia Leaders’ Virtual Summit is the cornerstone of the multi-faceted bilateral relations.
  • India and Australia have been each other’s important trading partners. Australia is the 17th largest trading partner of India and India is Australia’s 9th largest trading partner.
  • India and Australia are partners in the trilateral Supply Chain Resilience Initiative (SCRI) arrangement along with Japan which seeks to enhance the resilience of supply chains in the Indo-Pacific Region.
  • Further, India and Australia are also members of the recently formed Quad, also comprising US, and Japan, to further enhance cooperation and develop partnership across several issues of common concerns.


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