On Saturday, Australian Minister for Trade, Tourism, and Investment Dan Tehan and Indian Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles Piyush Goyal signed the ‘Australia India Economic Cooperation and Trade Agreement’ (AIECTA) in the presence of the countries’ prime ministers (PMs), Narendra Modi and Scott Morrison. The agreement builds on the Morrison administration’s investment worth $210 million to bolster economic relations and opportunities with New Delhi.
A historic day for India-Australia ties. 🇮🇳🇦🇺
— Piyush Goyal (@PiyushGoyal) April 2, 2022
We are grateful to our leaders, PM @NarendraModi ji and PM @ScottMorrisonMP for their constant guidance & motivation.
The #IndAusECTA will open a plethora of opportunities in goods & services for both the nations. pic.twitter.com/KBo7vK0bbq
Speaking after signing the agreement, Modi noted his prior interactions with his Australian counterpart and thanked former Australian PM Tony Abbott for his role in accelerating the agreement. The Indian premier also acknowledged the mutual confidence and potential between both economies. “This is a watershed moment for our bilateral relations. On the basis of this agreement, together, we will be able to increase the resilience of supply chains, and also contribute to the stability of the Indo-Pacific region,” he added. He stressed that “people-to-people” ties will be the key pillar in making the agreement a success.
Strengthening India-Australia economic and trade relations.
— Narendra Modi (@narendramodi) April 2, 2022
https://t.co/uPFd0sWvJM
Morrison, too, joined Modi in thanking Abbott for being “able to reach on this day.” He stated that the deal would bolster the countries’ economic relationship, facilitate cheaper trade, and support trade and development. “Importantly, it sends a powerful signal to our businesses and investors alike, that one of the biggest doors is now open to a great economic partnership. Two dynamic regional economies, like-minded democracies, working together for mutual benefit,” Morrison added.
Morrison also called the AIECTA the first step toward a “full comprehensive economic cooperation agreement” between the two countries by the end of 2022.
Prior to signing the partnership, Morrison said, “It’s an expression of the deep partnership that Prime Minister Modi and I have already established. Particularly on issues of security, the work we do through the Quad, the work we’re particularly doing on critical minerals and rare earth, which is such a big part of Australia’s engagement with like-minded countries around the world to secure supply chains.”
The AIECTA aims to strengthen economic relations, create new opportunities for professionals, students, and businesses, and make Australia’s exports to India cheaper. According to a press release, the agreement will remove tariffs on more than 85% of Australian goods exported to India (worth more than $9.46 billion a year). It would also benefit Australian businesses and households, with 96% of Indian imports set to be duty-free upon the agreement’s entry into force.
India-Australia unlock a new era of trade. 🇮🇳🇦🇺
— Piyush Goyal Office (@PiyushGoyalOffc) April 2, 2022
The signing of the #IndAusECTA heralds a new growth trajectory for our goods sector.
Zero duty on over 96% of Indian exports will immediately bring in major gains for several labour-intensive industries. pic.twitter.com/g8pTo9V6CY
As per the press release, India was Australia’s seventh-largest trading partner in 2020, with two-way trade amounting to at least $18 billion. India was also Australia’s sixth-largest goods and services export market, estimated at $12.69 billion. “Our Government’s goal is to lift India into our top three export markets by 2035, and to make India the third-largest destination in Asia for outward Australian investment,” the statement added.
Commenting on the AIECTA, Morrison said, “This agreement opens a big door into the world’s fastest-growing major economy for Australian farmers, manufacturers, producers, and so many more. By unlocking the huge market of around 1.4 billion consumers in India, we are strengthening the economy and growing jobs right here at home.”
The agreement is expected to benefit exporters of crayfish, sheep meat, wool, wine, critical minerals, mining resources, rare earth, berries, avocados, cherries, beans, cashews, almonds, lentils, apricots, mandarins, alumina, coal, metallic ores, Liquified Natural Gas (LNG), pharmaceutical products, and other medical devices.
The Australia-India Economic Cooperation & Trade Agreement, signed today, builds on 🇦🇺's relationship with 🇮🇳—a vital #IndoPacific partner. It strongly reinforces our shared commitment to deepening 🇦🇺-🇮🇳 ties & rules-based 🌏 trade. #IndAusECTA pic.twitter.com/0jARmNES9r
— Marise Payne (@MarisePayne) April 2, 2022
Like Modi, Tehan remarked that the partnership would also improve people-to-people links. “This agreement will turbocharge our close, long-standing and highly complementary economic relationship in areas such as critical minerals, professional services, education and tourism. It will create new opportunities for jobs and businesses in both countries, while laying the foundations for a full free trade agreement,” he added.
Furthermore, Australia and India agreed to promote agricultural trade and will initiate measures to conclude an enhanced agricultural Memorandum of Understanding (MoU) in the near future.