In a significant boost for Indian exporters, Commerce and Industry Minister Piyush Goyal announced that India will secure zero-duty access to the Australian market starting January 1, 2025. This milestone is a key outcome of the India-Australia Economic Cooperation and Trade Agreement (ECTA), which was signed last year and came into force in December 2022.
ECTA Paves the Way for Tariff-Free Exports
The India-Australia ECTA is a landmark pact designed to strengthen economic ties between the two nations. Under this agreement, Australia has committed to eliminating tariffs on 100% of its tariff lines for Indian products. This comprehensive coverage ensures that virtually all goods exported from India will eventually enter the Australian market duty-free.
Minister Goyal highlighted that the agreement is already yielding positive results. He noted that Indian exports to Australia, which were previously declining, have shown a 14% growth trend since the ECTA's implementation. This reversal signals the agreement's immediate impact in making Indian goods more competitive in the Australian marketplace.
Key Sectors Set to Benefit
The zero-duty access is expected to provide a substantial advantage to several labor-intensive and high-potential sectors of the Indian economy. Australian tariffs, which were as high as 4-5% on many products, will be completely eliminated.
Major beneficiary industries include:
- Textiles and Apparel: A sector that employs millions and stands to gain significantly from preferential access.
- Engineering Goods: Including machinery, auto parts, and electrical equipment.
- Gems and Jewellery: A traditional strength of Indian exports.
- Leather Products, Furniture, and Sports Goods: Diverse sectors with high growth potential.
This move is strategically timed to help Indian exporters capitalize on new opportunities and expand their market share in Australia, a high-income economy with strong demand for quality goods.
A Strategic Partnership and Future Prospects
The ECTA is more than just a trade deal; it is a cornerstone of the broader Comprehensive Strategic Partnership between India and Australia. Minister Goyal emphasized that the agreement is built on trust and mutual respect, reflecting the deep ties between the two democracies.
Looking ahead, both nations are already working to build upon the ECTA. Negotiations are ongoing to upgrade the pact into a Comprehensive Economic Cooperation Agreement (CECA). This expanded agreement would cover additional complex areas such as digital trade, government procurement, and potentially new rules for investments, further deepening economic integration.
The announcement underscores the Indian government's active efforts to secure favorable terms for its industries through bilateral agreements. With the zero-duty regime kicking in on the first day of 2025, Indian businesses are encouraged to prepare and align their strategies to maximize the benefits of this unprecedented access to the Australian market.
