Union commerce minister Piyush Goyal on Thursday said cheaper raw materials from Australia under the trade agreement will make India more competitive globally, besides enabling it to serve its domestic consumers better.
The Australia-India Economic Cooperation and Trade Agreement (ECTA) came into force today.
"There is a lot of potential for exporting finished goods to Australia since they hardly manufacture anything, they are largely a raw material and intermediate producing country, we will get cheaper raw materials which will not only make us more competitive globally but also enable us to serve Indian consumers better; enabling us to provide more quality goods at more affordable prices," Piyush Goyal said addressing industry representatives and the media in Mumbai earlier in the day.
Giving reference to the game of cricket which is famous in both countries, the Union commerce Goyal said that the agreement has been "negotiated with the speed of Bret Lee and the perfection of Sachin Tendulkar".
This is the second trade for India in 2022. On May 1, 2022, the trade agreement with UAE entered into force on May 1.
"Australia, which is largely dependent on imports, will benefit hugely, they will soon start seeing a lot more finished goods coming in from India, providing a huge amount of work and job opportunities in both goods and services, provided by Indian talent," Goyal added.
Further, on double taxation on IT services exports, the minister said the trade agreement will eliminate such issues.
"The Agreement will also eliminate Double taxation on IT services which were making us less competitive and making us less profitable in the IT sector, the double taxation has now been removed by amending the law, and from 1st April, double taxation for IT sector will be over, we will save millions and millions of dollars right now, and over a billion dollars going forward, maybe 5 - 7 years going forward, giving us the competitive edge and also creating a lot many jobs," he explained.
What does this India-Australia Economic and Cooperation Trade Agreement entail?
The Ind-Aus ECTA provides an institutional mechanism to encourage and improve trade between the two countries. It covers almost all the tariff lines dealt with by India and Australia.
India will benefit from preferential market access provided by Australia on 100 percent of its tariff lines, including all the labor-intensive sectors of export interest to India, such as Gems and Jewellery, Textiles, leather, footwear, furniture, food, and agricultural products, engineering products, medical devices, and Automobiles.
On the other hand, India will be offering preferential access to Australia on over 70 percent of its tariff lines, including lines of export interest to Australia, which are primarily raw materials and intermediaries such as coal, mineral ores, and wines.
Further, India has offered market access to Australia in around 103 sub-sectors and Most Favoured Nation status in 31 sub-sectors from the 11 broad service sectors such as business services, communication services, construction, and related engineering services.
Also, both countries agreed to a separate Annex on Pharmaceutical products under this agreement, which will enable fast-track approval for patented, generic, and biosimilar medicines.
Through this trade agreement, it is estimated that an additional 10 lakh jobs would be created in India.
( With inputs from ANI )
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