India and Australia are on the cusp of strengthening their economic ties with the tenth round of negotiations for a Comprehensive Economic Cooperation Agreement (CECA) set to take place in Sydney from August 19-22, 2024. This critical round marks a significant step forward, building upon the existing Economic Cooperation and Trade Agreement (ECTA) that came into effect in December 2022.
Having already completed discussions on four of the 19 policy areas, the upcoming talks aim to finalize over 10 chapters, with a particular focus on enhancing market access for goods and services. Both nations are eager to expand the scope of the agreement by including new sectors such as competition policy, micro, small, and medium enterprises (MSMEs), and critical minerals, further solidifying their economic partnership.
The tenth round of negotiations, the first physical meeting since January, will be a crucial step towards a comprehensive trade agreement. Progress has already been made on several chapters, and the aim is to close negotiations on more than 10 during this round. The discussions will build on the provisions of the ECTA, focusing heavily on market access for goods and services.
The CECA aims to include new areas of cooperation reflecting the mutual interests of both countries, such as competition policy, MSMEs, innovation, agricultural technology, critical minerals, and sports. Significant progress has been achieved in areas like rules of origin and digital trade, with visible convergence on issues like competition, innovation, labor, gender, and the environment.
India is actively pushing for the removal of non-tariff barriers that hinder the export of agricultural products to Australia. Additionally, India seeks to address pharmaceutical pricing controls, particularly for generic medicines.
The CECA builds upon the foundation laid by the ECTA, an interim pact implemented in December 2022. The ECTA provided zero-duty access for 98.3% of tariff lines, accounting for 96.4% of India’s exports to Australia. Bilateral trade between the two countries reached nearly $24 billion in 2023-24, with India exporting $7.9 billion worth of goods and importing $16.1 billion. While the ECTA came into force, trade figures have remained relatively stagnant, hovering around $25 billion since 2021-22. The CECA is expected to further expand the zero-duty access provided under the ECTA, covering over 6,000 sectors, including textiles, furniture, jewelry, leather, and machinery.
The upcoming negotiations for the India-Australia CECA are a testament to the growing economic partnership between the two nations. The CECA, once finalized, is expected to significantly boost bilateral trade and unlock new opportunities for businesses in both countries.
