India and Australia have signed an ambitious free trade agreement (FTA) in goods and services on slashing import duties on a wide variety of items including wines, coal, meat, macadamia nuts and wool from Australia and pharmaceuticals, textiles, engineering goods, leather and gems & jewellery from India.
What is India-Australia Economic Cooperation and Trade Agreement (AI-ECTA)?
- The India-Australia Economic Cooperation and Trade Agreement (AI-ECTA) is a free trade agreement to facilitate trade between the two countries.
- This agreement makes the cost of production even cheaper compared to other countries. The trade of the two countries is boosted and the economy of the two countries is boosted.
- Under FTA, two countries agree to reduce customs duties, regulatory laws, subsidies and quotas on products under import-export. This will benefit both the countries.
Relation between Indian and Australia
- Strategic: The Quad
- However, Australia later rejoined the dialogue in 2017 on the sidelines of the ASEAN Summit, signalling a re-ignition in Australia’s interest in the dialogue.
2. Defence relation:
- India–Australia both borders the Indian Ocean and has a shared interest in the maintenance of freedom of navigation and trade.
- Australia and India are committed to working together to enhance maritime cooperation and has a formal bilateral naval exercise (AUSINDEX) since 2015.
- From 2016-18, the armies of the countries conducted a joint military exercise dubbed “AUSTRA HIND”.
3. Consular Cooperation
- India and Australia signed The Mutual Legal Assistance Treaty (MLAT) and the Extradition Treaty in June 2008, which has been ratified by both the Governments, and has come into force since January 2011.
How India-Australia FTA is Unique?
- India-Australia FTA is Unique as, excluding India-Australia and India-Japan FTAs, more or less all of India’s FTAs are with other developing countries (Singapore in 2005, South Korea in 2010, ASEAN in 2010, Malaysia in 2011 and UAE in 2022)
- Under the FTA, Australia will provide zero-duty access to India for about 96.4% (by value) of its exports.
- This covers many products that currently attract 4-5% customs duty in Australia.
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