INDIA-AUSTRALIA TRADE AGREEMENT
India and Australia signed an Economic Cooperation and Trade Agreement (ECTA) recently
MAIN FEATURES OF THE AGREEMENT
- Guided by a Preamble
- Divided into multiple sections that will govern what is hoped to be the most expansive bilateral trade
- Has a section on goods exports, and lays out clearly “Rules of Origin” that are aimed at creating anti-dumping measures
- There are also sections that are aimed at providing remedies and mechanisms for resolving trade disputes
- Has a compulsory review mechanism after 15 years of implementation
WILL AUSTRALIA GET ACCESS TO INDIA’S AGRICULTURE MARKET
- Australia will get the opportunity to export certain varieties of agricultural produce like potatoes, lentils, and meat products with some caveats
- Bovine meat is not part of the agreement
- Australia may also send machineries that are required for food processing
- In a historic first, India may open up to a wide-range of alcoholic and non-alcoholic drinks including Australian beer. Australian wines costing over $5 may face lower import duties in the Indian market
- Australia will provide ‘preferential access’ to “all the labour-intensive sectors” of export items from India such as gems and jewellery, textiles, leather, footwear, furniture, food, engineering products, medical devices and automobiles
- India will also allow Australia to export raw materials under preferential terms like coal and mineral ores.
- Australia has “offered wide ranging commitments” in around 135 sub-sectors and Most Favoured Nation in 120 sub-sectors which cover key areas of the Indian services sector like IT, ITES, business services, health, education and audio-visual services.
- Indian chefs and yoga teachers will get specific entry quotas into Australia, while Indian students in Australia will be able to secure work visas for periods ranging from 18 months to four years on a ‘reciprocal’ basis
- Students completing a diploma Down Under will be considered for an 18-month work visa; and those completing their undergraduation may get two years and those with a Ph.D. may be considered for a four-year visa.
- India and Australia have agreed to enable fast track approval for patented, generic and biosimilar medicines
- Therapeutic Goods Regulators of both sides will have a role to play in monitoring and ensuring smooth trade in pharma products between the two sides
- Both sides have agreed to audits of imports that require sanitary and phytosanitary inspection as per the law of the land
- The importing side will ensure that plants and plant products, animal products and other goods, and their packaging are inspected through recognised methodologies
- If either party finds examples of non-compliance, remedial measures will be taken by both sides.
DISPUTE SETTLEMENT MECHANISM
- Both parties have agreed to hold consultations — and make “every effort” to find a solution — in case of disputes that may emerge in the course of trade in goods or services
- In case they have to resort to international arbitration, they may opt for an organisation (i.e, World Trade Organization) where both are member
- May also use “good offices” and form panels with qualified members drawn from government and business to resolve the disputes.
- The dispute resolution may range from 45 days to 15 months
RULES OF ORIGIN
- The rules of origin are based on the principle that they should be “wholly obtained or produced in the territory of one or both of the parties”
- This section ensures that waste material will not be exported by either side unless they contribute to the production of any of the items listed in the ECTA.