3 Years of India-Australia Economic Cooperation & Trade Agreement (ECTA) | Current Affairs | Vision IAS
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In Summary

  • The India-Australia ECTA, signed in 2022, aims to double bilateral trade in five years, offering Australia 100% duty-free access for Indian goods.
  • Key features include extended post-study work visas for Indian students, "Work and Holiday" visa quotas, and fast-track pharmaceutical approvals.
  • The relationship holds strategic significance, with both nations collaborating in QUAD, Indo-Pacific initiatives, and critical minerals for India's clean energy transition.

In Summary

The India-Australia Economic Cooperation and Trade Agreement (INDAUS ECTA) is a landmark trade pact signed in 2022, aimed at doubling bilateral trade within five years.

  •  It is India's first agreement with a developed country in over a decade.

Key Features of the India-Australia ECTA

  • Trade in Goods: Australia offers 100% duty-free access for Indian exports (textiles, leather, jewellery).
  • Trade in Services and Professional Mobility: Extended post-study work visas (2-4 years) for Indian students and quota for "Work and Holiday" visas. 
  • Safeguards and Regulatory Cooperation: Robust Rules of Origin prevent third-party re-routing. Includes fast-track pharmaceutical approvals. 
  • Other: Eliminates double taxation on Indian IT offshore income, etc. 

India Australia Economic Relations

  • Trade Status: In FY25, India was Australia's 8th largest trading partner, and Australia was India's 14th largest trading partner.
  • Total Bilateral Trade: The bilateral trade between India and Australia in FY25 stood at US$ 24.1 billion.
  • Key Indian Exports: petroleum products, engineering goods, Drugs and Pharmaceuticals,etc
  • Key Indian Imports: Coal, gold, etc.  

Significance of India Australia Relationship:

  • Strategic and Geopolitical Significance
    • Indo-Pacific Convergence: E.g., Australia-India Indo-Pacific Oceans Initiative Partnership (AIIPOIP) 
    • The QUAD Pillar: Australia and India are key members of the Quadrilateral Security Dialogue (QUAD), alongside the US and Japan.
    • Defense Cooperation: Mutual Logistics Support Agreement (MLSA) and high-level military exercises like Exercise Malabar and AUSINDEX
    • Multilateral Alignment: E.g., G20, East Asia Summit (EAS), and the Indian Ocean Rim Association (IORA).
  • Supply Chain Resilience: E.g., Supply Chain Resilience Initiative (SCRI).
  • Critical Minerals Partnership: Australia is a major source of critical minerals (lithium, cobalt) essential for India’s Electric Vehicle (EV) mission and clean energy transition.
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RELATED TERMS

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Critical Minerals

Minerals that are essential for the economy and national security, and whose supply chains are vulnerable to disruption. Their secure and sustainable supply is a key focus for ACITI to ensure resilient supply chains, especially in the context of clean energy technologies.

Supply Chain Resilience Initiative (SCRI)

The Supply Chain Resilience Initiative (SCRI) is a trilateral agreement between India, Japan, and Australia, aimed at building resilient supply chains and reducing dependence on any single country. It seeks to promote diversification of supply chains in the Indo-Pacific region.

Mutual Logistics Support Agreement (MLSA)

A Mutual Logistics Support Agreement (MLSA) is a defense pact that allows the military forces of two countries to use each other's bases, ports, and airfields for refueling, resupply, and logistical support. This agreement enhances interoperability and operational reach for the participating nations' defense forces.

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