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India’s goods exports to Australia in April-November 2023 increased 14 per cent (year-on-year) to $5.87 billion, while the country’s overall merchandise exports declined, indicating that the India-Australia Economic Cooperation and Trade Agreement (ECTA) implemented in December last year may have started delivering, officials have said.
The increase in exports of items on which preferential tariffs have been offered by Australia have increased by a higher 17.8 per cent in April-October 2023 to $1.58 billion.
“...there are some early shoots that indicate that there has been growth in exports from both sides where preferential tariffs were given,” said Rajesh Agrawal, Additional Secretary, Department of Commerce, at a press briefing on Friday.
Imports down
India’s imports from Australia in the April-November 2023 period declined 19 per cent to $11.14 billion, although there has been increases in areas the country has been pushing for such as agriculture products.
“Agricultural exports to India are 50 per cent higher since the trade agreement came into force on December 29, 2022. This includes massive boosts in products like sheep meat, seafood, broad beans, citrus and almonds,” per a statement from the Australian government.
From January 1, 2024, Australian exports to India will be even more competitive, with more tariff cuts on high quality Australian products such as seafood, cherries, sandalwood and wine, the statement added.
“In the year since this agreement came into effect, we have seen enormous gains for a range of Australian exporters, including our farmers, manufacturers, and our universities,” said Australian Trade Minister Don Farrell.
As part of the India-Australia ECTA, Australia eliminated tariffs on 98 per cent of its tariff lines when the agreement came into force at the end of 2022. It will eliminate tariffs on the remaining lines within five years. India eliminated tariffs on 40 per cent of its tariff lines and will eliminate tariffs on another 30 per cent of its tariff lines in a phased manner over the next seven years.
Full-fledged CECA
The two countries are now working on a full-fledged Comprehensive Economic Cooperation Agreement (CECA). “This comprehensive trade agreement would allow us to go further in areas such as digital trade, and deliver commercially meaningful new market access for our exporters,” the Australian government’s statement pointed out.
There are, however, chances that the CECA may be put off till after India’s general elections in early 2024, an official told businessline.
“The CECA deals with sensitive areas including a greater number of agricultural products. It may be difficult for the government to take on commitments just before the elections. So there are chances that this may get put off,” the official said.
India and Australia hope to increase bilateral trade to $100 billion annually from $30 billion now after the CECA is implemented.
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