Recognising India’s move towards becoming the world’s third-largest economy by the end of the decade, Australia is working on a newroad map for engaging with New Delhi thatwill complement and build on existing work under the bilateral Comprehensive Economic and Co-operation Agreement (CECA).

“The new roadmap will support our efforts to ensure closer bilateral economic co-operation and bolster broader efforts to secure a more prosperous region for Australia and India. It will complement and build on existing work under CECA by keeping momentum between negotiating rounds and exploring new areas of bilateral opportunity through public consultations,” per a discussion paper circulated by the Australian government to stakeholders seeking their inputs.

There has never been a better time to engage economically with India, which was already the most populous country in the world and had an economy growing at a fast pace, the paper observed. “In 2023, India was our fourth-largest export market and is on track to be the world’s third-largest economy by the end of this decade (per IMF),” the paper readied by Australia’s Department for Foreign Affairs and Trade (DFAT) note

Deepening economic ties

India and Australia implemented the bilateral Economic Co-operation and Trade Agreement (ECTA) on December 20, 2022, under which Australia agreed to eliminate tariffs on 96 per cent of goods imported from India immediately, increasing it to 100 per cent by January 1, 2026. India agreed to eliminate tariffs on over 85 per cent of Australian goods, which would rise to 90 per cent by January 1, 2026.

The India-Australia CECA, being negotiated at present, is set to be much deeper than the existing ECTA. It is likely to cover more products as well as new areas such as services, digital trade, government procurement and Rules of Origin (ROO)-Product Specific Rules Schedule.

Through the discussion paper, the Australian government sought inputs from stakeholders, including industry and academics, on the major areas of opportunity; major obstacles and how these could be addressed; business and trade opportunities arising from the two countries commitment to a transition to netzero; and sectors holding the greatest opportunity for growth and the ways to go about it.

Suggestions have also been sought on changes to regulatory standards and other trade and investment rules that could be brought about to encourage greater trade and investment and on further trade diversification opportunities.

India growth trajectory

“Australia is well positioned to both benefit from and contribute to India’s growth story – if we target our efforts wisely. Work on both sides in recent years has delivered results, including through the Australia-India Economic Cooperation and Trade Agreement (ECTA), the opening of a Consulate General in Bengaluru (which was matched by India’s in Brisbane), and the establishment of the Centre for Australia India Relations,” the paper stated noting that the CECA was under negotiations.

There was also significant untapped potential and much more needed to be done in terms of updation, adaptation and refinement of efforts as climate change, strategic and geoeconomic shifts continued to reshape the region, it added.

India is hopeful that bilateral trade, valued at around $24 billion in 2023-24, may touch $100 billion over the next few years, once the trade pacts are fully implemented.