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The India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) has promoted the mutual growth of both economies over the past two years.
It is a bilateral trade agreement signed in April 2022 and came into effect on December 29, 2022.
It reduces tariffs on over 90% of Australian goods exports to India, and 96% of Indian imports to Australia are now tariff-free, with plans to achieve 100% tariff-free trade by 2026.
It is a step towards a full Comprehensive Economic Cooperation Agreement (CECA) to strengthen economic relations between the two countries.
The ECTA has significantly expanded bilateral trade. From 2020-21 to 2022-23, bilateral merchandise trade more than doubled, growing from USD 12.2 billion to USD 26 billion.
Labour-intensive sectors: Indian industries such as textiles, leather, footwear, and sports goods now enjoy duty-free access to the Australian market, making Indian exports more competitive.
Manufacturing sector: Indian exports like textiles, machinery, and jewellery have gained from reduced tariffs. India's textile industry, in particular, benefits from Australia’s position as the largest importer of garments in the southern hemisphere.
Power sector: Cheaper coal imports from Australia are vital for India’s power sector. Other important imports include Liquefied Natural Gas (LNG), alumina, and manganese.
Service sector: India gains access to Australia’s services market, including IT, business services, health, education, and audio-visual sectors. Australia has offered post-study work visas and work and holiday visa for Indian students and youth.
Australia has committed to promoting India’s services in IT, business services, health, education, and audio-visual sectors.
Australia has offered a post-study work visa of 2-4 years for Indian students and a work and holiday visa for Indian youth. It has also introduced a quota for 1,800 Indian chefs and yoga teachers, enhancing India’s service sector access in Australia.
Way Forward
India-Australia aims to achieve AUD 100 billion in bilateral trade by 2030, focusing on economic integration and leveraging the success of the ECTA to promote mutual prosperity.
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PRACTICE QUESTION Q.Arrange the following Australian cities in north-to-south directions: 1. Darwin 2. Brisbane 3. Sydney 4. Melbourne Select the correct answer using the codes given below: A) 1, 2, 3, 4 B) 2, 1, 3, 4 C) 1, 3, 4, 2 D) 2, 4, 3, 1 Answer: A Explanation: The correct answer is A) 1, 2, 3, 4. Darwin is the northernmost city, followed by Brisbane, Sydney, and Melbourne in the south. |
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