Giving reference to the game of cricket which is famous in both countries, the Union commerce Goyal said that the agreement has been "negotiated with the speed of Bret Lee and the perfection of Sachin Tendulkar". The Economic Cooperation and Trade Agreement (ECTA) between Australia and India entered into force on December 29.
"There is a lot of potential for exporting finished goods to Australia because they hardly manufacture anything, they are largely a raw material and intermediate producing country, we will get cheaper raw materials which will not only make us more competitive globally but also enable us to serve Indian consumers better; enabling us to provide more quality goods at more affordable prices," Piyush Goyal said earlier this week in Mumbai, speaking to industry representatives and the media.
This is India's second trade in 2022. The trade agreement with the UAE went into effect on May 1, 2022. "Australia, which is heavily reliant on imports, will benefit enormously; they will soon begin to see a lot more finished goods coming in from India, providing a huge amount of work and job opportunities in both goods and services provided by Indian talent," Goyal added. Furthermore, the minister stated that the trade agreement will eliminate double taxation on IT services exports.
"The Agreement will also eliminate double taxation on IT services, which were making us less competitive and less profitable in the IT sector; the double taxation has now been removed by amending the law, and from 1st April, double taxation for the IT sector will be over, we will save millions and millions of dollars right now, and over a billion dollars going forward, maybe 5 - 7 years going forward, giving us a competitive edge and also creating a lot of jobs," says the agreement.
The Indo-Australia ECTA provides an institutional mechanism to encourage and improve bilateral trade. It covers almost all of India's and Australia's tariff lines. Australia will provide India with preferential market access on 100 percent of its tariff lines, including all labor-intensive sectors of export interest to India, such as gems and jewellery, textiles, leather, footwear, furniture, food and agricultural products, engineering products, medical devices, and automobiles.
On the other hand, India will provide preferential access to Australia on more than 70% of its tariff lines, including lines of export interest to Australia, such as coal, mineral ores, and wines. Furthermore, India has granted Australia market access in approximately 103 sub-sectors and Most Favored Nation status in 31 sub-sectors from the 11 broad service sectors, including business services, communication services, construction, and related engineering services.
Under this agreement, both countries agreed to a separate Annex on Pharmaceutical Products, which will allow for fast-track approval of patented, generic, and biosimilar medicines. It is estimated that this trade agreement will result in the creation of an additional 10 lakh jobs in India.
