India is expediting free trade agreement talks with Australia over the next two months to bridge differences on sensitive issues and close the negotiations, a senior government official said on Wednesday.
"Otherwise, Australia goes for elections next year, and the (talks for the) agreement may extend beyond that depending on the work we can accomplish in these two months," said Rajesh Agrawal, Additional Secretary in the Department of Commerce, speaking to reporters. The eleventh round of negotiations is expected to take place next month.
The India-Australia Economic Cooperation and Trade Agreement (AI-ECTA) came into effect in December 2022. Now, both sides are negotiating to broaden the scope of ECTA through a comprehensive economic cooperation agreement (CECA). Agrawal added that the utilisation of the existing trade agreement exceeds 80%, which indicates that businesses in both countries are benefiting significantly.
"They have guided officials to expedite the CECA, if possible. There are sensitivities on both sides, and we will be engaging over the next two months to reduce those sensitivities and hopefully reach a closure," Agrawal said.
Australia is a key trading partner for India in the Oceania region, with merchandise trade between the two nations reaching approximately USD 24 billion in 2023-24. India’s exports to Australia in the last fiscal year were USD 7.94 billion, while imports amounted to USD 16.15 billion. Since 2021-22, the trade figures have hovered around USD 25 billion annually.
Regarding India-ASEAN (Association of Southeast Asian Nations) discussions, Agrawal noted that India has strongly urged completing the review of the free trade agreement in goods by 2025. The review is important as India faces tariff asymmetry in the agreement, with blanket "74% plus" tariff elimination for ASEAN nations.
"We have higher tariff elimination from lower-order economies and lower tariff elimination from fast-growing and major economies. This tariff asymmetry needs to be addressed to ensure a balanced FTA during the review process," Agrawal explained.
India is also exploring a country-wise approach in the ASEAN review talks. "ASEAN is a 10-country bloc but not a customs union. We'd like to see differentiation, as they are at various stages of economic development," he said, emphasizing that bilateral talks could offer India more flexibility in negotiating tariff concessions. However, ASEAN typically follows a single set of concessions, which India is attempting to adjust.
ASEAN countries include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. The review is a long-standing request of Indian industry, with India seeking an upgraded agreement to eliminate trade barriers and prevent the misuse of the trade pact, which was signed in 2009.
ASEAN remains a crucial trading partner for India, accounting for about 11% of India's global trade. India's exports to ASEAN totaled USD 41.2 billion in 2023-24, while imports were USD 80 billion. ASEAN represents 10.9% of India's global trade.
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