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Negotiations for the Comprehensive Economic Cooperation Agreement (CECA) are now well underway
The India-Australia Economic Cooperation and Trade Agreement (Ind-Aus ECTA) has completed two years of remarkable success, solidifying the economic partnership between the two nations and driving mutual growth. Since its implementation in December 2022, the agreement has significantly boosted bilateral trade and economic ties, opening new avenues for businesses, MSMEs, and employment in both countries.
Significant Trade Growth
Bilateral merchandise trade has seen a substantial increase since the agreement’s inception. From USD 12.2 billion in 2020-21, trade surged to USD 26 billion in 2022-23. While there was a slight moderation to USD 24 billion in 2023-24, India’s exports to Australia continued to grow, recording a 14% increase during the period.
Between April and November 2024, merchandise trade stood at USD 16.3 billion, reflecting sustained momentum.
Key sectors such as textiles, chemicals, and agriculture have seen substantial growth, with new export categories like gold studded with diamonds and turbojets highlighting the diversification enabled by the agreement. On the import side, essential raw materials such as metalliferous ores, cotton, and wood have bolstered Indian industries, showcasing the win-win nature of this partnership.
However, sectors such as electronics and engineering present further opportunities for growth.
High Utilisation of Trade Benefits
The Ministry of Commerce and Industry reported that the trade utilisation rates of the ECTA have been impressive, with export utilisation at 79% and import utilisation at 84% by 2023. These figures underscore the effectiveness of the agreement in facilitating trade and reducing procedural burdens for businesses.
The agreement has also played a pivotal role in reducing India’s trade deficit with Australia. During April to September 2024, India’s goods exports to Australia amounted to USD 3.99 billion, compared to USD 4.89 billion in the same period last year, marking an 18% decline. Imports also fell by 18%, narrowing the trade deficit and reflecting greater balance in trade.
Comprehensive Economic Cooperation Agreement (CECA)
Building on the success of the Ind-Aus ECTA, negotiations for the Comprehensive Economic Cooperation Agreement (CECA) are well underway. CECA aims to deepen the bilateral trade agenda with an ambitious scope, covering five core areas: goods, services, digital trade, government procurement, and product-specific rules of origin.
Ten formal rounds of negotiations and inter-sessional discussions have been held since February 2023. The most recent stocktake meeting, held in New Delhi from December 4–6, 2024, saw extensive discussions on trade in goods and services, mobility, and agri-tech cooperation. The Indian delegation, led by Rajesh Agrawal, Additional Secretary and Chief Negotiator from the Department of Commerce, engaged with their Australian counterparts headed by Ravi Kewalram, First Assistant Secretary from the Department of Foreign Affairs and Trade.
Key areas of focus during the discussions included aligning market access mechanisms with India’s food security objectives, integrating emerging sectors like critical minerals, innovation, MSMEs, and sports, and enhancing agricultural innovation and supply chain resilience.
Future Growth
The India-Australia partnership is poised for further growth. Both nations have set an ambitious target to achieve AUD 100 billion in bilateral trade by 2030. The CECA’s successful implementation is expected to play a pivotal role in realizing this target by fostering deeper economic integration and expanding market access.
The mutual commitment to clean energy collaboration and the inclusion of emerging sectors underscore the dynamic nature of this partnership. India’s focus on becoming a developed nation by 2047, as envisioned by Prime Minister Narendra Modi, aligns seamlessly with the shared goals of the two countries.
Conclusion
The Ind-Aus ECTA has laid a strong foundation for a robust economic partnership, offering significant benefits to businesses and industries in both countries. As the agreement enters its third year, the progress achieved so far serves as a testament to the potential of India and Australia’s collaboration. With CECA on the horizon, the bilateral economic relationship is set to scale new heights, contributing not only to the prosperity of the two nations but also to a more resilient and dynamic global economy.
Significant Trade Growth
Bilateral merchandise trade has seen a substantial increase since the agreement’s inception. From USD 12.2 billion in 2020-21, trade surged to USD 26 billion in 2022-23. While there was a slight moderation to USD 24 billion in 2023-24, India’s exports to Australia continued to grow, recording a 14% increase during the period.
Between April and November 2024, merchandise trade stood at USD 16.3 billion, reflecting sustained momentum.
Key sectors such as textiles, chemicals, and agriculture have seen substantial growth, with new export categories like gold studded with diamonds and turbojets highlighting the diversification enabled by the agreement. On the import side, essential raw materials such as metalliferous ores, cotton, and wood have bolstered Indian industries, showcasing the win-win nature of this partnership.
However, sectors such as electronics and engineering present further opportunities for growth.
High Utilisation of Trade Benefits
The Ministry of Commerce and Industry reported that the trade utilisation rates of the ECTA have been impressive, with export utilisation at 79% and import utilisation at 84% by 2023. These figures underscore the effectiveness of the agreement in facilitating trade and reducing procedural burdens for businesses.
The agreement has also played a pivotal role in reducing India’s trade deficit with Australia. During April to September 2024, India’s goods exports to Australia amounted to USD 3.99 billion, compared to USD 4.89 billion in the same period last year, marking an 18% decline. Imports also fell by 18%, narrowing the trade deficit and reflecting greater balance in trade.
Comprehensive Economic Cooperation Agreement (CECA)
Building on the success of the Ind-Aus ECTA, negotiations for the Comprehensive Economic Cooperation Agreement (CECA) are well underway. CECA aims to deepen the bilateral trade agenda with an ambitious scope, covering five core areas: goods, services, digital trade, government procurement, and product-specific rules of origin.
Ten formal rounds of negotiations and inter-sessional discussions have been held since February 2023. The most recent stocktake meeting, held in New Delhi from December 4–6, 2024, saw extensive discussions on trade in goods and services, mobility, and agri-tech cooperation. The Indian delegation, led by Rajesh Agrawal, Additional Secretary and Chief Negotiator from the Department of Commerce, engaged with their Australian counterparts headed by Ravi Kewalram, First Assistant Secretary from the Department of Foreign Affairs and Trade.
Key areas of focus during the discussions included aligning market access mechanisms with India’s food security objectives, integrating emerging sectors like critical minerals, innovation, MSMEs, and sports, and enhancing agricultural innovation and supply chain resilience.
Future Growth
The India-Australia partnership is poised for further growth. Both nations have set an ambitious target to achieve AUD 100 billion in bilateral trade by 2030. The CECA’s successful implementation is expected to play a pivotal role in realizing this target by fostering deeper economic integration and expanding market access.
The mutual commitment to clean energy collaboration and the inclusion of emerging sectors underscore the dynamic nature of this partnership. India’s focus on becoming a developed nation by 2047, as envisioned by Prime Minister Narendra Modi, aligns seamlessly with the shared goals of the two countries.
Conclusion
The Ind-Aus ECTA has laid a strong foundation for a robust economic partnership, offering significant benefits to businesses and industries in both countries. As the agreement enters its third year, the progress achieved so far serves as a testament to the potential of India and Australia’s collaboration. With CECA on the horizon, the bilateral economic relationship is set to scale new heights, contributing not only to the prosperity of the two nations but also to a more resilient and dynamic global economy.
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