Foreign Policy Watch: India-Australia

India-Australia sign Economic Cooperation and Trade Agreement (ECTA)


From UPSC perspective, the following things are important :

Prelims level : ETCA

Mains level : India-Australia relations

India and Australia signed an Economic Cooperation and Trade Agreement (ECTA) in the presence of PM Narendra Modi and his counterpart in Canberra Scott Morrison.

India-Australia ECTA

  • It is the first trade agreement of India with a developed country after more than a decade.
  • The Agreement encompasses cooperation across the entire gamut of bilateral economic and commercial relations between the two friendly countries.
  • It covers areas like Trade in Goods, Rules of Origin, Trade in Services, Technical Barriers to Trade (TBT), Sanitary and Phytosanitary (SPS) measures, Dispute Settlement, Movement of Natural Persons, Telecom, Customs Procedures, Pharmaceutical products, and Cooperation in other Areas.
  • Eight subject specific side letters covering various aspects of bilateral economic cooperation were also concluded as part of the Agreement.

Background of the ECTA

  • The negotiations for India-Australia ECTA were formally re-launched on 30 September 2021 and concluded on a fast-track basis by the end of March 2022.
  • India and Australia enjoy excellent bilateral relations that have undergone transformative evolution in recent years, developing along a positive track, into a friendly partnership.
  • Growing India-Australia economic and commercial relations contribute to the stability and strength of a
  • Australia is the 17th largest trading partner of India and India is Australia’s 9th largest trading partner.

Features of the agreement

  • The ECTA between India and Australia covers almost all the tariff lines dealt in by India and Australia respectively.
  • India will benefit from preferential market access provided by Australia on 100% of its tariff lines.
  • This includes all the labour-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.
  • India will be offering preferential access to Australia on over 70% of its tariff lines, including lines of export interest to Australia which are primarily raw materials and intermediaries such as coal, mineral ores and wines etc.
  • As regards trade in services, Australia has offered wide ranging commitments in around 135 sub sectors and Most Favoured Nation (MFN) in 120 sub sectors which cover key areas of India’s interest like IT, ITES, Business services, Health, Education, and Audio visual.
  • Both sides have also agreed to a separate Annex on Pharmaceutical products under this agreement, which will enable fast track approval for patented, generic and biosimilar medicines.

Way ahead

  • The India-Australia ECTA will further cement the already deep, close and strategic relations between the two countries.
  • It will significantly enhance bilateral trade in goods and services, create new employment opportunities, raise living standards, and improve the general welfare of the peoples of the two countries.


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