The eleventh round of negotiations are expected to be held next month. The India-Australia Economic Cooperation and Trade Agreement (AI-ECTA) came into effect from December 2022.
Now both the sides are negotiating to widen the scope of ECTA through a comprehensive economic cooperation agreement (CECA).
The utilisation of the trade agreement so far is more than 80 per cent, which means that businesses of both the countries are benefitting out of this, he said.
“They have guided the officials to see in case the CECA can be expedited if possible. There are sensitivities on both sides, and we will be engaging with each other over the next two months to see that those sensitivities can be brought down and can be reduced until we can achieve a closure,” Agrawal added.
Australia is an important trading partner of India in the Oceania region, with merchandise trade between India and Australia reaching around USD 24 billion in 2023-24. India’s exports to Australia last fiscal stood at USD 7.94 billion, while imports were USD 16.15 billion. The trade between the two countries has been hovering at around USD 25 billion since 2021-22. On India-Asean (Association of South East Asian Nations) review of free trade agreement in goods, Agrawal said that India has pitched strongly to complete the exercise by 2025.
The review assumes significance as India is facing tariff asymmetry in the agreement wherein it has given out blanket “74 per cent plus” tariff elimination for all the Asean countries.
“But we have got higher tariff elimination from low order economies and low tariff elimination from fast growing and big economies. This tariff asymmetry needs to be addressed so that it is a balanced FTA in the review process,” he added.
India is also discussing with the bloc to undertake the review talks country-wise.
“Asean is a 10-country block but they are not a customs union. We would like to see a certain amount of differentiation because all of them are at different levels of economic development,” he said.
Talking bilaterally, he said, will give India “a latitude to have a better fit” of the tariff concessions.
But as a practice, Asean does not follow this and they like to have a single set of concessions.
“We are trying to discuss it and trying to see what flexibility we can build in the review so that asymmetries can be ironed out,” he added.
ASEAN countries are Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.
The review of the agreement is a long-standing demand of Indian industry and India is looking forward to an upgraded pact. India is asking for a review of the agreement to eliminate barriers and misuse of the trade pact.
The pact was signed in 2009. ASEAN is an important trade partner of India with about 11 per cent share in India’s global trade.
India’s exports to the 10-nation bloc ASEAN were USD 41.2 billion in 2023-24, while imports aggregated at USD 80 billion in the last fiscal. ASEAN accounts for 10.9 per cent of India’s global trade.