Economic Cooperation and Trade Agreement (ECTA)

Economic Cooperation and Trade Agreement (ECTA)

News: India and Australia signed an Economic Cooperation and Trade Agreement (ECTA) in the presence of PM Narendra Modi and his counterpart in Canberra Scott Morrison.

About:
• First trade agreement of India with a developed country after more than a decade.
• It covers areas such as Trade in Goods, Rules of origin, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute settlement, Telecom, Pharmaceutical products.

Features of Agreement:
• It provides an institutional mechanism to encourage and improve trade between the two nations.
• India will benefit from preferential market access provided by Australia on 100% of its tariff lines such as textiles, gems and jewelry, leather, food and farm produce stand likely to benefit.
• India will be offering preferential access to Australia on over 70% of its tariff lines interest to Australia which are primar wines etc.
• Indian graduates from STEM (Science, Technology, Engineering and Mathematics) will be granted extended post-study work visas.
• Australia will also set up a programme to grant v in Australia.

India-Australia relations:
• The India-Australia Comprehensive Strategic Partnership initiated during the Virtual Summit held in June 2020 is the cornerstone of India
• Australia is the 17th largest trading partner of India
• India-Australia bilateral trade for both merchandise and services is valued at
• India’s merchandise exports to Australia grew 135% between 2019 and 2021. India’s exports consist primarily of a broad-based basket largely of finished products and were
• India’s merchandise imports from Australia were materials, minerals and intermediate goods.
• India-Australia are partners in the Trilateral Supply Chain Resilience Initiative (SCRI) along with Japan which aims to enhance resilience of supply chains in the Indo-Pacific region.
• India-Australia are also members of QUAD grouping.

Way Forward:
• The India-Australia ECTA will further cement the already deep, close and strategic relations between the two countries.
• It will significantly enhance bilateral trade in goods and services, create new employment opportunities, raise living standards, and improve the general welfare of the people of the two countries.