Australia hopes digital trade agreement with India by the year-end

Australia expects to sign a Comprehensive Economic Cooperation Agreement (CE­PA) with India by the year-end, which will include a deal on digital trade that it said will further facilitate bilateral trade.
 

“Australia will also seek improved access for service suppliers, and modern investor protections to increase investor confidence and drive investment, with appropriate safeguards for governments’ rights to regulate. An agreement co­uld facilitate digital trade by including modern and forward-looking rules which support the use of digital tools to enable trade,” according to the Australian government’s India Economic Strategy to 2035 update.

The outbreak of the global pandemic has impacted Australia’s investment in India to a degree consistent with trends elsewhere in Asia. However, the total Australian investment stock in 2020 was comparable to 2018 levels, and over the five years to 2019 had a trend of 15.1 per cent growth, the update said.

The report provides a five-year action plan to the Australian government to accelerate economic integration between India and Australia. Energy, tourism, education, and health are some of the key sectors mentioned in the document — India Economic Strategy to 2035 — that was first released in 2018.

The latest report responds to evolving challenges and opportunities for both countries, including lessons learned throughout the Covid-19 pandemic, efforts to bolster supply chain resilience, India’s economic reform agenda and progress under the Australia-India Comprehensive Strategic Partnership.

The report was launched weeks after India and Australia signed a free trade deal known as economic cooperation and trade agreement (ECTA). Under the agreement, Canberra will provide duty-free access in its market for over 95 per cent tariff lines. The deal will take close to four months to be implemented.

The India-Australia trade deal is only crucial from an economic perspective but also for strategic reasons. India has entered into the trilateral Supply Chain Resilience Initiative (SCRI) arrangement with Australia and Japan, which aims to enhance the resilience of supply chains in the Indo-Pacific Region and develop dependable sources of supply and explore other countries who could join in the initiative, capacity building, promotion of domestic manufacturing.

India has also formed the Quad alliance with the US, Australia, and Japan to further enhance cooperation and develop partnership across issues of common concerns.

Australia is the 17th largest trading partner of India and India is Australia’s 9th largest trading partner in the current fiscal. Bilateral trade in goods and services for both the countries is expected to rise from the existing $27.5 billion to $45 billion in five years.