Australia is keen to conclude negotiations for the Comprehensive Economic Cooperation Agreement (CECA) with India in the next six-seven months since it may not be in a position to take hard decisions from early next year as the country prepares for its federal elections, according to sources.

New Delhi, however, may find it a challenge to fast-track the talks, especially in sensitive areas such as agriculture, digital trade and government procurement, as views of coalition partners also need to be taken into account by the new BJP-led government, an industry official said.

“India-Australia CECA negotiations were well on track before talks briefly halted due to the Indian elections. The Australian side is keen that the momentum be now maintained as it has barely a six-seven months window to conclude the talks because of the upcoming elections next year,” the source said.

Australia’s federal elections is likely in mid-2025 and the ruling government is expected to get into the election mode from early 2025 and steer away from controversial decisions, the source said.

The India-Australia Economic Cooperation and Trade Agreement (ECTA)--which was an early harvest trade deal focussing mostly on goods trade–came into force on December 29 2022.

It served as a stepping stone for the CECA which is to be a deeper and comprehensive agreement covering five tracks agreed in the ECTA, including goods, services, digital trade, government procurement and Rules of Origin (ROO)-Product Specific Rules Schedule.

New areas in which either party has shown interest for coverage include competition policy, MSME, gender, innovation, agri-tech, critical minerals and sports.

“While the ECTA covered trade in most goods, some sensitive categories like agriculture and dairy were mostly excluded. Australia, which is a major player in farm and dairy products, wants market access at least for premium items that are not in competition with items produced domestically in India. But with a new Minister heading the Agriculture Ministry and the interests of coalition partners that are also to be taken into account, negotiations could be tougher than earlier,” the industry official said.

Moreover, areas like government procurement and digital trade, where India has not opened up significantly in an of its existing free trade deals because of sensitivities, may also be difficult to navigate.

While in the inter-sessional on government procurement in February this year, 23 out of 25 articles of the government procurement chapter had been fully/partially cleaned, things were yet to be tied up, the official added.

In 2023-24, India’s imports from Australia declined 15 per cent to $ 16.15 billion. India’s exports during the fiscal increased 14.23 per cent to $7.94 billion. Australia was India’s 13th largest export destination accounting for 1.83 per cent of total exports in 2023-24. The country was India’s 14th largest import source accounting for 2.39 per cent of total imports during the fiscal.

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