The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), which was inked last week between the two countries will provide not only greater access to Indian goods in that country, but will also allow the continent nation to gain market access in India. This, in a way, would be crucial to New Delhi, as it can seek energy supply from Australia on a long term basis, at a time when the country is facing acute energy shortage.
As per provisions of the trade agreement, access to Australian goods in Indian markets would be possible because the AI-ECTA has eliminated tariffs on more than 85 per cent of goods from that country on immediate basis.
In other words, tariffs on items such as coal, alumina, metallic ores, liquified natural gas (LNG) and other crucial minerals - which Australia exports - will be immediately reduced to zero.
With the pact enabling duty-free import of these commodities, India - which is heavily dependent on import - could ensure long term supply of the above mentioned commodities, especially coal and gas from Australia to resolve its energy crisis.
In October 2021, India was on the brink of an acute energy crisis as five states including Delhi, were staring at the prospects of suffering black-outs due to non availability of the dry fuel in power plants.
AI-ECTA, which is the first trade agreement that India has signed with a developed economy in more than 10 years, will come into force in four months time. The pact is expected to give impetus to bilateral trade as it will not only eliminate or lower tariffs on a large number of goods, but also address the non-tariff barriers such as technical barriers to trade.
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