Post by account_disabled on Mar 9, 2024 4:03:25 GMT -5
After a decade of intermittent negotiations, on April 1, India and Australia signed a comprehensive interim free trade agreement that allows tariff-free trade on a broad list of products.
The agreement offers obvious economic benefits: mainly, India imports key raw materials and intermediate products from Australia and, in turn, exports finished products to Australia. Annual bilateral trade is expected to nearly double from $27.5 billion in 2021 to around $50 billion over the next five years. The agreement eliminates tariffs on more than 85% of Australian exports to India (rising to 91% over the next ten years), while 96% of Indian products arriving in Australia will be duty-free.
This agreement largely has geopolitical overtones, as both countries have especially bad relations with China and seek to counteract the influence of the Asian giant both in the region and in their respective economies, promoting a free, open and inclusive Indo-Pacific also with cooperation. from the USA and Japan.
Both countries have very Ecuador Mobile Number List tense relations with Beijing and are eager to reduce their economic dependence. Above all, Australia is the one that benefits the most in the long term, as it has a large volume of trade with China and India provides it with an alternative to export its products to more than 1.3 billion consumers.
Australia's ties with China, its largest trading partner, have steadily deteriorated in recent years following accusations of political meddling and disputes over the origins of COVID-19. For its part, India has a persistent standoff with China along its Himalayan border, where a standoff left at least 20 Indian and four Chinese soldiers dead two years ago.
In the words of Indian Prime Minister Narendra Modi, this agreement makes it possible to increase the resilience of supply chains and also contribute to the stability of the Indo-Pacific region.
Australia and India began trade negotiations for the agreement in May 2011 and held nine rounds of dialogue before suspending the process in September 2015. Last September, almost two years after India withdrew from the Regional Comprehensive Economic Partnership ( RCEP), negotiations resumed.
This agreement demonstrates that India is willing to sign bilateral agreements and reduce the negative consequences of not joining the RCEP. In that sense, India already has trade agreements with most RCEP participants, including the 10-member Association of Southeast Asian Nations along with Japan and South Korea.
Under the new pact, India will benefit from preferential access to the Australian market in labour-intensive sectors such as jewellery, textiles, leather, furniture, food, engineering products, medical devices and vehicles. On the other hand, it will offer Australia preferential access in raw materials, coal, minerals, wine and other sectors. The two sides hope to conclude negotiations on a broader economic cooperation agreement by the end of this year.
Friction between Canberra and Beijing has led to a series of trade sanctions from China on Australian exports, including coal, red meat, seafood, wine and grains.
With the entry into force of the agreement, India will be able to import Australian coal cheaper than before, an element that until now represents 70% of Australian exports to India and is subject to a 2.5% tax. Within four months, it will not be subject to tariffs.
The agreement offers obvious economic benefits: mainly, India imports key raw materials and intermediate products from Australia and, in turn, exports finished products to Australia. Annual bilateral trade is expected to nearly double from $27.5 billion in 2021 to around $50 billion over the next five years. The agreement eliminates tariffs on more than 85% of Australian exports to India (rising to 91% over the next ten years), while 96% of Indian products arriving in Australia will be duty-free.
This agreement largely has geopolitical overtones, as both countries have especially bad relations with China and seek to counteract the influence of the Asian giant both in the region and in their respective economies, promoting a free, open and inclusive Indo-Pacific also with cooperation. from the USA and Japan.
Both countries have very Ecuador Mobile Number List tense relations with Beijing and are eager to reduce their economic dependence. Above all, Australia is the one that benefits the most in the long term, as it has a large volume of trade with China and India provides it with an alternative to export its products to more than 1.3 billion consumers.
Australia's ties with China, its largest trading partner, have steadily deteriorated in recent years following accusations of political meddling and disputes over the origins of COVID-19. For its part, India has a persistent standoff with China along its Himalayan border, where a standoff left at least 20 Indian and four Chinese soldiers dead two years ago.
In the words of Indian Prime Minister Narendra Modi, this agreement makes it possible to increase the resilience of supply chains and also contribute to the stability of the Indo-Pacific region.
Australia and India began trade negotiations for the agreement in May 2011 and held nine rounds of dialogue before suspending the process in September 2015. Last September, almost two years after India withdrew from the Regional Comprehensive Economic Partnership ( RCEP), negotiations resumed.
This agreement demonstrates that India is willing to sign bilateral agreements and reduce the negative consequences of not joining the RCEP. In that sense, India already has trade agreements with most RCEP participants, including the 10-member Association of Southeast Asian Nations along with Japan and South Korea.
Under the new pact, India will benefit from preferential access to the Australian market in labour-intensive sectors such as jewellery, textiles, leather, furniture, food, engineering products, medical devices and vehicles. On the other hand, it will offer Australia preferential access in raw materials, coal, minerals, wine and other sectors. The two sides hope to conclude negotiations on a broader economic cooperation agreement by the end of this year.
Friction between Canberra and Beijing has led to a series of trade sanctions from China on Australian exports, including coal, red meat, seafood, wine and grains.
With the entry into force of the agreement, India will be able to import Australian coal cheaper than before, an element that until now represents 70% of Australian exports to India and is subject to a 2.5% tax. Within four months, it will not be subject to tariffs.