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Sansad TV: Perspective- India- Australia Free Trade Agreement





India and Australia will soon implement the free trade agreement on a mutually agreed date as the Australian Parliament has approved the pact between the two countries. The agreement was signed by both sides in April this year. Australian Prime Minister Anthony Albanese made the announcement on Twitter. Prime Minister Narendra Modi responded by saying that the entry into force of India Australia ECTA will be greatly welcomed by our business communities, and will further strengthen the India-Australia Comprehensive Strategic Partnership. Commerce Minister Piyush Goyal termed it a big recognition of India’s growing global stature. He said Indian IT industry, students and many labour intensive sectors will soon reap the benefits of this landmark deal.

Free Trade Agreements (FTAs):

  • Economic theory tells us that FTAs are not always sure-win strategies because these create as well as divert trade.
  • FTAs need to be designed in a manner that they enhance complementarities amongst partners and overcome regulatory hurdles.
  • It has been reported that the FTA will be remodelled into three separate deals—trade, investment and geographical indications (GIs).
  • While the investment deal is seen as a standalone agreement, the one on GIs could be integrated with the trade deal.
  • It may be in India’s interest to ensure that all the three negotiations move in parallel and feed into each other.
  • Since India unilaterally terminated bilateral investment treaties (BIT), including those with the EU member states, the EU appears to be keen to conclude an investment deal that includes InvestorState Dispute Settlement (ISDS) provisions.

Economic and trade relationship:

  • The India-Australia economic relationship has grown significantly in recent years. India’s growing economic profile and commercial relevance to the Australian economy is recognized, both at the federal and state level in Australia.
  • India’s exports to Australia stood approximately at US$ 4.6 billion (A$6.1 bn) in 2016 while India’s import from Australia during the same period stood at US$ 11 billion (A$14.6 bn).
  • India’s main exports to Australia are Passenger Motor Vehicle & machinery, Pearls, Gems and Jewellery, Medicaments and Refined Petroleum while India’s major imports are Coal, Non-monetary Gold, Copper, Wool, Fertilizers and Education related services.
  • India-Australia also has a Joint Ministerial Commission (JMC) which was established in 1989 to enable interaction at a government and business level on a broad range of trade and investment related issues.
  • The two countries are currently discussing a Comprehensive Economic Cooperation Agreement (CECA) which will provide greater market access to exporters of goods and services. The two sides have exchanged their goods and services offer lists.


The Quad:

  • The informal strategic Quadrilateral Security Dialogue (QSD) that was initiated by Japan’s Prime Minister Shinzo Abe in 2007 was largely in response to China’s growing power and influence.
  • For Australia in 2007 therefore, to begin embroiling itself in any emerging military alliance with Japan against China, in the absence of any formal reconciliation between Tokyo and Beijing over the events of the Second World War (Nanking Massacre), was incompatible with our long-term national interests.
  • However, Australia later rejoined the dialogue in 2017 on the sidelines of the ASEAN Summit, signalling a re-ignition in Australia’s interest in the dialogue.

Defence relation:

  • India–Australia both borders the Indian Ocean and has a shared interest in the maintenance of freedom of navigation and trade.
  • Australia recognizes India’s critical role in supporting security, stability and prosperity of the Indian Ocean region. Australia and India are committed to working together to enhance maritime cooperation and has a formal bilateral naval exercise (AUSINDEX) since 2015.
  • From 2016-18, the armies of the countries conducted a joint military exercise dubbed “AUSTRA HIND”.

Consular Cooperation

  • India and Australia signed The Mutual Legal Assistance Treaty (MLAT) and the Extradition Treaty in June 2008, which has been ratified by both the Governments, and has come into force since January 2011.

Possible intensive bilateral political and institutional engagements:

  • There are a host of emerging issues — from reforming the World Health Organization to 5G technology and from strengthening the international solar alliance to building resilience against climate change and disasters — that lend themselves to intensive bilateral political and institutional engagement.
  • The two leaders must order their security establishments to develop strategic coordination in the various sub-regions of the Indo-Pacific littoral.
  • The eastern Indian Ocean that lies between the shores of peninsular India and the west coast of Australia ought to be the top priority.
  • Eastern Indian Ocean, connecting the two oceans, is at the heart of the Indo-Pacific.
  • This is where Delhi and Canberra can initiate a full range of joint activities, including on maritime domain awareness, development of strategically located islands and marine scientific research.
  • The sea lines of communication between the Indian and Pacific oceans run through the Indonesian archipelago.
  • Given the shared political commitment to the Indo-Pacific idea between Delhi, Jakarta and Canberra and the growing pressures on them to secure their shared waters, India and Australia must seek trilateral maritime and naval cooperation with Indonesia.
  • The current trilateral dialogue between Japan, Australia and India (JAI) can be expanded from the diplomatic level to practical maritime cooperation on the ground.


  • The region faces a range of traditional security challenges that relate to issues of trust in the form of China which has emerged as a regional power and has little faith in rule based order.
  • There are also a growing number of non-traditional and trans-boundary security challenges, including terrorism, natural disasters and pandemics.
  • Also, India faces unfavourable trade with Australia and despite opening talks for a comprehensive economic cooperation agreement in 2011, the agreement which would have significantly lowered the trade balance in favour of India, has remained elusive.

Way Forward:

  • Shared values, shared interests, shared geography and shared objectives are the bedrock of deepening India-Australia ties and the cooperation and coordination between the two countries have picked up momentum in recent years.
  • India no longer sees Australia at the periphery of India’s vision but at the centre of its thoughts.
  • It is only by building a series of overlapping bilateral and minilateral platforms for regional security cooperation that Delhi and Canberra can limit the dangers of the growing geopolitical imbalance in the Indo-Pacific.
  • Therefore, the future must be woven around the three pillars, which are economic relationship, geostrategic congruence and people-to-people ties, and the glue that can bind this is a sustained momentum.