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What is the News?
India and Australia have announced that they are set to conclude an Early Harvest Agreement and a Comprehensive Economic Cooperation Agreement(CECA) thereafter.
What is an Early Harvest Agreement?
An interim or early harvest trade agreement is used to liberalise tariffs on the trade of certain goods between two countries or trading blocs before a comprehensive FTA (Free Trade Agreement) is concluded.
What will the India-Australia Early Harvest Agreement likely cover?
The interim agreement will cover most areas of interest for both countries including goods, services, rules of origin, sanitary and phytosanitary measures and customs procedures.
Under the agreement, India is likely to seek easier visa access for both students and professionals visiting Australia.
On the other hand, Australia is likely to seek market access for wines and agricultural products which are not produced on a large scale in India.
However, Australia would likely not seek market access for products in dairy, beef and wheat categories as they are sensitive sectors for India.
What is the current Bilateral Trade between India and Australia?
Bilateral trade between the two countries stood at about $12.5 billion in FY21 and has already surpassed $17.7 billion in the first 10 months of FY22.
Key imports from Australia include coal, gold and LNG while key exports to the country from India include diesel, petrol and gems and jewellery.
How has the Quad impacted trade relations between India and Australia?
India and Australia are both members of the Quad (Quadrilateral Security Dialogue) along with the US and Japan.
The Quad has given impetus to increasing trade relations between all members. Australia already has FTAs with both the US and Japan.
Australia has said that all four countries could start building a framework for economic cooperation within the countries of the Quad after they announced a deal with India.
Source: This post is based on the article “Explained: India-Australia interim trade agreement and FTA” published in Indian Express on 15th Feb 2022.