India-Australia Economic Cooperation and Trade Agreement Comes into Force

India-Australia Economic Cooperation and Trade Agreement Comes into Force: The Economic Cooperation and Trade Agreement between India and Australia will go into effect on December 29. On April 2, 2022, India and Australia signed the Economic Cooperation and Trade Agreement (ECTA). 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.

December 2022 Current Affairs Quiz

Significance of This Trade Agreement:

• Under this trade agreement, Indian exports will benefit from preferential zero-duty market access in Australia for 100 per cent of its tariff lines. The labor-intensive industries in India that produce jewellery, textiles, leather, furniture, food and agricultural products, engineering products, and medical gadgets would all gain from it.
• India has provided preferential access to Australia on over 70 per cent of its tariff lines, which are primarily raw materials and intermediaries. As a result of this agreement, 10 lakh jobs are estimated to be created in the country. In five years, the current 31 billion US dollars in bilateral trade is anticipated to reach 45 to 50 billion dollars.
• ECTA will save Australian exporters around $2 billion a year in tariffs, while consumers and business will save around $500 million in tariffs on imports of finished goods, and inputs to our manufacturing sector.
• In FY22, India’s trade balance with Australia was $8.5 billion, with $8.3 billion in exports and $16.8 billion in imports. After the trade agreement takes effect, bilateral trade is anticipated to increase from $25 billion in the present to $45–50 billion in five years.