textiles, leather, engineering goods and gems and jewellery are expected to benefit from the agreement, which is expected to boost bilateral trade in goods and services from around $27 billion, to $45-50 billion over a period of five years, according to an estimate by the Indian government. Meanwhile, 85 per cent of Australia’s exports to the South Asian nation will also enjoy zero-duty access to the Indian market, including coal, sheep meat and wool, along with lower duty on Australian wines lentils, almonds and certain fruits.
Another major achievement under the ECTA is that Indian and Australian companies may be able to bid in each other’s federal government tenders, under chapter on government procurement. This would mean that the India is likely to enjoy access to around $10 billion worth of official procurement of Canberra, pegged at $60-65 billion annually.
The parties also intend to negotiate a chapter on digital trade, and the Ministry of Commerce and Industry in New Delhi said it will begin talks with other ministries on this subject.
“Within 75 days after the date of signature of this agreement, the negotiation subcommittee shall commence negotiations on amendments to this agreement,” said the ECTA. This will be “on a without prejudice basis in areas including inter alia market access for goods and services, a complete product specific rules schedule, a digital trade chapter and a government procurement chapter, to transform this agreement into a Comprehensive Economic Cooperation Agreement,” it added.
An official told the Economic Times that MSMEs and defence are two major areas that are not covered by the chapter on government procurement. “Australia has an MSME (micro, small and medium enterprises) order under which their government procurement is protected, similar to India’s public procurement (preference to Make in India) order,” the newspaper quoted the official saying. The individual also added that defence is a large part of the $60-65 billion that is not covered in the ECTA, which means that that likely gains for India could be in the remaining $10 billion government procurement market.
