India and Australia took a significant step towards a strengthened economic partnership by holding the tenth round of negotiations for a Comprehensive Economic Cooperation Agreement (CECA) in Sydney from August 19-22. These talks are part of ongoing efforts by both countries to finalize free trade agreements with multiple nations.
The negotiations covered a wide range of key areas, including trade in goods and services, digital trade, government procurement, rules of origin, and agricultural technology (agritech). According to a statement from the Indian Ministry of Commerce, the discussions were intensive, leading to a clearer understanding of the remaining provisions and potential for convergence on outstanding issues.
India is particularly focused on eliminating non-tariff barriers that hinder the export of agricultural products to Australia, such as grapes, okra, and pomegranate. While Australia has already agreed to eliminate tariffs on all products from India, these non-tariff barriers remain a significant obstacle to increased agricultural trade. Ajay Srivastava, founder of the Global Trade Research Initiative (GTRI), highlighted this challenge, noting that despite zero tariffs, these barriers continue to affect exports.
Another key area of discussion is the finalization of rules of origin, which were not fully negotiated during the signing of the interim trade agreement in December 2022. This agreement, which aimed to provide immediate benefits for both countries, has led to a significant increase in trade, particularly in pulses. Australia has emerged as a major supplier of lentils to India, with imports reaching 366,433 tonnes from January to July 2024, representing 66.3% of India’s total lentil imports.
The upcoming eleventh round of talks, scheduled for November in New Delhi, will aim to address remaining challenges and finalize the CECA. Both sides are committed to reaching a balanced outcome that takes into account their respective domestic sensitivities. In addition to the ongoing negotiations, Australia has proposed the inaugural meeting of the India-Australia Agri Tech Forum (IAATF) in New Delhi on September 23. This forum, aimed at strengthening collaboration in the agriculture and horticulture sectors, will bring together Indian and Australian stakeholders, including industry representatives, research institutions, and government officials, to explore opportunities for technology transfer and knowledge sharing.
The potential benefits of a comprehensive trade agreement between India and Australia are substantial. Australia is a significant trading partner for India in the Oceania region, with bilateral merchandise trade reaching approximately $24 billion in the 2023-24 fiscal year. A finalized CECA would further boost trade volumes and strengthen the economic relationship between the two countries, fostering growth and prosperity in both markets.
