India-Australia trade pact will boost bilateral trade to $100 billion by 2030: Piyush Goyal.
MELBOURNE, Apr 6: The Economic Cooperation and Trade Agreement signed by India and Australia is expected to boost bilateral trade between the two countries to USD 100 billion by 2030 from the current USD 26-27 billion, Union Commerce and Industry Minister Piyush Goyal said in Melbourne.
Addressing the University of Melbourne along with Dan Tehan, Australian Minister for Trade, Tourism and Investment, in Melbourne, Goyal said bilateral trade between India and Australia is expected to grow at a much faster rate than earlier estimated. Earlier, it was estimated that India-Australia bilateral trade would increase to USD 50 billion in five years after the signing of the trade pact.
“Together this marriage can truly have far-reaching dimensions for both our economies and, if I dare say, for the rest of the world also where we can collectively engage and have an outreach to other parts of the world,” he said.
Goyal invited Australian businesses to invest in India. “We offer you transparency. We offer you our trust, and rule of law. We are two democratic nations, two people who love sports, both are members of the Commonwealth,” he said.
The minister also addressed members of the business community from both countries at the Melbourne Cricket Ground.
Addressing the business community, Goyal noted that India and Australia have complementarities that can benefit both countries. India has a huge market while Australia has investible surplus.
He said the India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) will unlock the huge market of almost 1.4 billion consumers in India to Australian industries.
“We are now one, that’s what the Unity Agreement is all about. And at this watershed moment in our relations, I think it’s only appropriate that we break every barrier between the two countries whether it’s movement of goods, services, people, technology, education, science, medical knowledge, we break all these barriers, see how we can work together as true brothers,” Goyal said.
The minister said there is huge potential in areas like textiles, pharma, hospitality, gems and jewellery, IT, Startups etc., and Accountancy in Services, which will create huge employment in both countries.
India-Australia trade agreement profitable for both countries: Piyush Goyal
NEW DELHI, Apr 2: After India sealed the trade deal with Australia, Union Minister of Commerce and Industry, Piyush Goyal said that the agreement is profitable for both countries with Australia’s raw materials and India’s quality finished goods.
Union Minister said, “No one has expected that we would be able to seal the trade deal with developed countries like Australia. Australia is the country with whom we don’t have any competition. Australia has quality raw materials and India has quality finished goods. We both component each other. The agreement is a win-win for both countries.” The India-Australia Economic Cooperation and Trade Agreement (IndAus ECTA) was signed by commerce minister Piyush Goyal and his counterpart Australian trade, tourism and investment minister Dan Tehan in a virtual ceremony attended by Prime Minister Narendra Modi and his Australian counterpart Scott Morrison.
Goyal said that this trade pact will create one million jobs in the next 4-5 years, says Piyush Goyal, Minister for Commerce and Industry. This is the first trade agreement with a developed economy after more than a decade. This agreement will be signalling for other developed countries’ agreements such as the UK, Canada and the EU, with whom India is currently negotiating for Free Trade Agreement.
“We expect 1 million jobs creation in India in next 4-5 yrs. A number of new opportunities will open for Indian chefs and Yoga instructors in the time to come. We’ve also discussed the cooperation of education institutions between India and Australia,” Goyal said.
“We’re removing trade barriers which will lead to doubling of trade in the future that’ll have great potential for labour-oriented sectors. This free trade is expected to take bilateral trade from the existing USD 27 billion to nearly USD 45-50 billion in the next 5 years,” he added.
Union Minister pointed out the differences in Australia and Indian products imports. He said, “Australia imports homemade furnishing and Apparel heavily but the Indian share is very limited. Our apparel exporters told us that they only get a nominal margin and pay 5 per cent duty while exporting their products to Australia which is not a lucrative market, now when they get duty free access then they will benefit. Footwear, Automobile, Auto components, Leather, pharmaceuticals, gems and jewellery will benefit. IT and Technology, Research and Development, and the Tourism sector will also get the benefit from this deal.”
Minister said that there are over and around 1.3 lakh Indian students living and studying in Australia. “We’re looking at a work and holiday visa arrangement for promoting tourism. A post-study work visa between 2 and 4 years will be available for Indian students, particularly for STEM (Science, Technology, Engineering, and Mathematics) graduates. We have opened the way for students aspiring to study and work in Australia,” he said.
Talking about access to Australian wine, Goyal said, “We have consulted the Indian wine industry and stakeholders on multiple occasions. They had given us suggestions. They suggested us minimum import price for high-quality wines.”
“And assured them that their interest will be safeguarded. India will give concession and market access to Australian wine over and above the price tag of USD 5/750 millilitre. India doesn’t have any competition in this price tag. Investment and quality will come in the Indian wine market. Indian wineries will be benefitted from the investment and technology of Australia. Grape Farmers will get an opportunity. Indian winners can also sell their wines globally,” he added.
Australia is the 17th largest trading partner of India and India is Australia’s ninth largest trading partner. India-Australia bilateral trade for both merchandise and services is valued at USD 27.5 billion in 2021. India’s merchandise exports to Australia grew 135 per cent between 2019 and 2021.
India’s exports consist primarily of a broad-based basket largely of finished products and were USD 6.9 billion in 2021.
India’s merchandise imports from Australia were USD 15.1 billion in 2021, consisting largely of raw materials, minerals and intermediate goods. Three-fourths of India’s imports consist of coal, with 70 per cent of coal being coking coal. Australia has a surplus in merchandise trade of about USD 8 billion, primarily because of coal imports which are USD 11.2 billion.
Historic Trade Deal with India
Australia’s historic trade agreement with India, the Australia-India Economic Cooperation and Trade Agreement, which will further strengthen relationship between the two countries, while making Australian exports to India cheaper and creating huge new opportunities for workers and businesses.
PM Modi said the newly signed trade deal will contribute to the increasing supply chains resilience and stability of the Indo-Pacific region.
Australian Prime Minister Scott Morrison said that the signing of the Agreement further develops the promise of economic relations between the two countries.
The Australian government said that the deal will eliminate tariffs on more than 85 per cent of Australian goods exports to India, rising to almost 91 per cent over 10 years. He added that the agreement would create enormous trade diversification opportunities for Australian producers and service providers bound for India, valued at up to $14.8 billion each year.
Australian households and businesses will also benefit, with 96 per cent of Indian goods imports entering Australia duty-free on entry into force.
Tariffs will be eliminated on more than 85 per cent of Australian goods exports to India (valued at more than $12.6 billion a year), rising to almost 91 per cent (valued at $13.4 billion) over 10 years.
Benefits of AI ECTA include:
• Sheep meat tariffs of 30 per cent will be eliminated on entry into force, providing a boost for Australian exports that already command nearly 20 per cent of India’s market
• Wool will have the current 2.5 per cent tariffs eliminated on entry into force, supporting Australia’s second-largest market for wool products.
• Tariffs on wine with a minimum import price of US$5 per bottle will be reduced from 150 per cent to 100 per cent on entry into force and subsequently to 50 per cent over 10 years (based on Indian wholesale price index for wine).
• Tariffs on wine bottles with minimum import price of US$15 will be reduced from 150 per cent to 75 per cent on entry into force and subsequently to 25 per cent over 10 years (based on Indian wholesale price index for wine).
• Tariffs up to 30 per cent on avocados, onions, broad, kidney and adzuki beans, cherries, shelled pistachios, macadamias, cashews in-shell, blueberries, raspberries, blackberries, currants will be eliminated over seven years.
• Tariffs on almonds, lentils, oranges, mandarins, pears, apricots and strawberries will be reduced, improving opportunities for Australia’s horticulture industry to supply India’s growing food demand.
• The resources sector will benefit from the elimination of tariffs on entry into force for coal, alumina, metallic ores, including manganese, copper and nickel; and critical minerals including titanium and zirconium.
• LNG tariffs will be bound at 0 per cent at entry into force.
• Tariffs on pharmaceutical products and certain medical devices will be eliminated over five and seven years.
Minister for Trade, Tourism and Investment Dan Tehan said AI ECTA would also further strengthen the people-to-people links between our countries. India was Australia’s third largest market for services exports in 2020.
The announcement builds on the Morrison Government’s $280 million investment to further grow our economic relationship and support jobs and businesses in both countries, which includes:
• $35.7 million to support cooperation on research, production and commercialisation of clean technologies, critical minerals and energy.
• $25.2 million to deepen space cooperation with India and
• $28.1 million to launch a Centre for Australia-India Relations.
AI ECTA is an interim agreement and both countries continue to work towards a full Comprehensive Economic Cooperation Agreement.
Minister Goyal said, there are over and around 1.3 lakh Indian students living and studying in Australia. “We’re looking at a work and holiday visa arrangement for promoting tourism. A post-study work visa between 2 and 4 years will be available for Indian students, particularly for STEM (Science, Technology, Engineering, and Mathematics) graduates. We have opened the way for students aspiring to study and work in Australia,” he said.