On the 2nd of April, India and Australia marked a monetary cooperation and trade agreement to guarantee barrier-free trade between the two nations. The agreement was signed between The Commerce and Industry Minister Piyush Goyal and the Australian Minister for Trade, Tourism, and Investment Dan Tehan, within sight of PM Narendra Modi and Australian PM Scott Morrison. Before the trade deal, Indian exports to Australia attracted a 4%-5% import duty due to which India had to face a lot of disadvantages in the trading activities compared to other countries like China, Thailand, and Vietnam, which already had the free trade agreement with Australia.
The trade agreement will likewise draw in Foreign Direct Investment (FDI) in the region and fortify commonly integral relationships among the countries. This is the subsequent significant trade policy that the Modi government has marked so far in the wake of a similar deal with the UAE early during the year. Discussing the benefits of this arrangement, the pharmaceutical sector is supposed to grow in both the regions supporting the economy and trading. Australia will get the potential chance to trade a wide assortment of agricultural produce and thus giving preferential access to all labour-escalated export items to India. Australia has likewise consented to amend its domestic regulations to stop taxing the offshore income of Indian firms offering technical services to Australia, including IT majors, TCS, Infosys, HCL and Wipro, which will empower Indian IT players to increase their Australian operations.
According to ChemAnalyst, sectors like textile, leather, jewellery, pharmaceutical product, and medicinal devices would improve from this agreement. The trade deal will benefit India as it imports a large number of its raw materials from Australia. The Australian market will also benefit from this deal as it will eliminate 85 % of the tariff on Australian goods exported to India. This deal will signal that Australia and India are committed to strengthening their economic ties and exploring new economic opportunities in future.