GS Paper 2:
Topics Covered: Bilateral Relations.
Context:
The interim trade agreement between India and Australia is unlikely to include items that both sides consider “sensitive”.
- The Indian and Australian negotiators will have the final “interim agreement” ready in 30 days and that the agreement will be a “win-win” document.
Background:
Both sides expressed confidence about signing a comprehensive Free Trade Agreement — CECA — and argued that the “interim agreement” is an “early harvest deal” aimed at boosting bilateral trade before the completion of the negotiations on the final CECA.
India- Australia bilateral trade:
- India’s exports to Australia amounted to $4.04 billion while imports were $8.24 billion in FY21.
- Major Indian exports to Australia are petroleum products, medicines, polished diamonds, gold jewellery, apparel etc, while key Australian exports to India include coal, LNG, alumina and non-monetary gold.
- In services, major Indian exports include travel, telecom and computer, government and financial services, while Australian services exports were principally in education and personal travel.
- In 2020, India was Australia’s seventh-largest trading partner and sixth largest export destination, driven by coal and international education.
Significance of the deal for India:
The interim agreement will mark the beginning of a phase of FTAs that India is aiming to achieve in the coming year.
- Apart from Australia, India is in talks to conclude similar FTAs and early harvest deals with Israel, Canada, the European Union and the United Arab Emirates.
- The Gulf Cooperation Council – the six country block – has also shown interest in concluding an FTA with India. The GCC includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and also the UAE.
Insta Curious:
Difference between CECA and CEPA:
- CECA – Comprehensive Economic Cooperation Agreement.
- CEPA – Comprehensive Economic Partnership Agreement.
The major “technical” difference between a CECA and CEPA is that CECA involve only “tariff reduction/elimination in a phased manner on listed/all items except the negative list and tariff rate quota (TRQ) items.
- CEPA also covers the trade in services and investment and other areas of economic partnership”.
- So CEPA is a wider term that CECA and has the widest coverage.
- Usually CECA is signed first with a country and after that negotiations may start for a CEPA.
InstaLinks:
Prelims Link:
- About CECA.
- About CEPA.
- India’s FTAs with other countries.
Mains Link:
Discuss the significance of India- Australia CECA.
Sources: the Hindu.
