Trade Game Changer: India’s Exports to Australia Soar by 14% Following Landmark Agreement!

India’s exports to Australia have experienced a significant uptick, registering a 14% year-on-year increase to $5.87 billion in the first eight months of the current financial year (April-November). This surge is attributed to a favorable trade agreement that came into effect a year ago, on December 29, opening up new avenues for Indian exports such as gold jewelry, garments, and tractor parts.

Conversely, India’s imports from Australia have declined by 19% on an annualized basis during April-November 2023, amounting to $11.15 billion. This decline is primarily due to decreased demand for coal, coke, and briquettes in India. Granular data for April-October 2023 indicates a significant 37% drop in imports of these commodities from Australia, totaling $6.17 billion compared to $9.75 billion in the same period in 2022. However, this decline is not exclusive to Australia, as India’s overall imports from across the globe have fallen by 33% during the same period.The India-Australia Economic Cooperation and Trade Agreement (ECTA), operationalized on December 29, 2022, has spurred trade growth between the two nations. While the agreement follows different timelines due to Australia’s calendar year and India’s financial year starting in April, exporters from both sides are exploring the newly opened avenues for preferential trade.

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Rajesh Agrawal, Additional Secretary in the Department of Commerce, emphasized that the agreement is positive for both partners, offering preferential tariffs and leveraging comparative advantages. Tapan Mazumder, Additional Director General of Foreign Trade, highlighted the significant growth potential in several export items, including gold jewelry, non-galvanized pipes for oil and gas, and cotton garments.

India’s imports from Australia, including wines, are expected to increase further as New Delhi grants more tariff-free access over time. The ECTA, which opened up 96% of tariff lines for Indian imports from Australia, is paving the way for a Comprehensive Economic Cooperation Agreement (CECA) between the two countries.

Experts view the India-Australia bilateral deal as mutually beneficial, with significant progress made in the past year and promising prospects for the future. According to Nilaya Varma, Co-founder and CEO of Primus Partners, the ECTA serves as a stepping stone towards a full CECA, providing competitive tariff elimination and opening new services markets for both countries.

Australia’s Department of Foreign Affairs and Trade acknowledges the transformative potential of the ECTA, emphasizing its role in eliminating tariffs and fostering trade cooperation between Australia and India.

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