India and Australia signed a comprehensive economic pact on Saturday, cutting tariffs on more than 85% of goods exported to the South Asian country, and both governments are securing alternative supply chains and tackling hardline China, according to the report. Bloomberg.
Closer engagement between the two quadruple partners comes even as Australia, along with Japan and the United States, is pushing India to take a stronger stance on Russia’s invasion of Ukraine. The country of South Asia has avoided directly condemning Russia.
“This agreement opens a major door to the world’s fastest growing large economy for Australian farmers, manufacturers, producers and so many others,” said Australian Prime Minister Scott Morrison.
The free trade agreement is expected to help India forge deeper ties with the commodity-rich nation, as it seeks to become a processing hub to revive the pandemic-hit economy. For Australia, the deal opens the door to a market of more than 1.4 billion people as Canberra struggles with China’s trade restrictions on a number of raw material exports.
The signing of the pact comes in the wake of Australia’s national election campaign, with the center-right Morrison government promoting a narrative of strong financial management as it struggles to gain ground in opinion polls. Speaking at the virtual signing ceremony, Australian Commerce Minister Dan Tehan said the agreement “will support Indo-Pacific economic stability”.
This is the second major trade agreement the Monti government has signed so far, following the signing of a similar agreement with the UAE earlier this year.
Trade Minister Piyush Goyal said India expects bilateral trade between the two countries to almost double from the current $ 27 billion to up to $ 50 billion over the next five years. “There is huge potential in areas such as textiles, pharmaceuticals, hospitality, gemstones and jewelry, among others,” Goyal said.
Adequate guarantees are provided for entrepreneurs in both countries, he said.
Australia is one of India’s top 15 trading partners, according to the Indian government. The pact, which has been in the works for almost a decade, will give greater market access and reduce tariffs on a range of products, such as mutton, wool, wine, coal, alumina and minerals, sold from Australia to India. .
India has also agreed to reduce tariffs on Australian wine. Tariffs on shipments with a minimum import price of $ 5 per bottle will be reduced to 100% from 150%, while duties on bottles costing $ 15 will be reduced to 75%.
The trade pact is also likely to help India further integrate with other nations of the China-backed Regional Comprehensive Economic Partnership, an agreement it had avoided due to concerns it would be overwhelmed by cheap Chinese products. India has bilateral agreements with most RCEP nations except China and New Zealand.
Source: Capital
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