The Australia-India Economic Cooperation and Trade Agreement (AI-ECTA), which was signed between the two countries last week, will not only provide greater access to Indian goods in that country, but also allow the continent nation to gain market access in India . , This, in a way, will be important for New Delhi, as it can demand energy supply from Australia on a long-term basis, at a time when the country is facing acute energy shortage.
In accordance with the provisions of the trade agreement, access to Australian goods in Indian markets will be possible as AI-ECTA has eliminated duties on more than 85 percent of goods from that country on an immediate basis.
In other words, tariffs on commodities such as coal, alumina, metal ores, liquefied natural gas (LNG) and other important minerals – which Australia exports – would be reduced to zero immediately.
With the agreement enabling duty-free imports of these commodities, India – which is heavily dependent on imports – will ensure long-term supplies of the above-mentioned commodities, especially coal and gas, from Australia to solve its energy crisis. Can do.
In October 2021, India was on the verge of an acute energy crisis, as five states, including Delhi, looked at the prospects of suffering from a black-out due to non-availability of dry fuel at 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 agreement is expected to give impetus to bilateral trade as it will not only eliminate or reduce tariffs on a large number of goods, but will also remove non-tariff barriers such as technical barriers to trade.