In a testament to the strengthening bond between India and Australia, the trade between the two nations has experienced remarkable growth, reaching $27.8 billion from a mere $15.6 million a decade ago. A study conducted by India Exim Bank revealed these significant developments, highlighting the transformative impact of the Economic Cooperation and Trade Agreement (ECTA) signed in April last year.
The study notes that approximately 96% of India’s imports from Australia consist of raw materials and intermediate goods, with coal being a primary contributor. Notably, India imports around 74% of coking coal from Australia. On the flip side, India’s exports to Australia primarily comprise finished products, particularly in the consumer goods sector.
The ECTA, which came into force on December 29, 2022, has played a pivotal role in fostering this growth. Looking ahead, the study suggests that converting the ECTA into a Comprehensive Economic Cooperation Agreement (CECA) could unlock even greater economic ties between the two nations.
Potential areas for cooperation under the CECA include support for small and medium enterprises, promotion of digital trade, trading in geographically indicated certified goods, settlement of trade payments in local currencies, strategic alliances for sourcing critical minerals, government procurement, agri-technology partnership, and collaboration in renewable energy. These avenues present promising opportunities for further collaboration and economic integration.
The study, released during the Asian Exim Bank Forum (AEBF) annual meeting in Sydney, underscores the positive trajectory of India-Australia trade relations. The AEBF, initiated by the Export-Import Bank of India for Asian Export Credit Agencies (ECAs), serves as a platform for fostering trade ties and exchanging valuable information among member nations.
As India and Australia continue to deepen their economic engagement, the study anticipates that the CECA could be a catalyst for expanded cooperation, opening doors to mutually beneficial initiatives across various sectors.
