The trade relationship between India and Australia has grown significantly in recent years.
The value of goods and services traded between the two countries has increased from $13.6 billion in 2007 to $30.4 billion in 2018, according to the Department of Foreign Affairs and Trade.
With a population of over 1.3 billion people, India is a rising powerhouse. Education, agriculture, energy, mining, tourism, healthcare, financial services, infrastructure, science and innovation, and sport all present substantial trade potential for the Australian economy due to the country’s relatively young population and planned expansion.
Would a Free Trade Agreement better benefit Australia and India?
In recent years, Australia’s exports to India have increased dramatically. In 2018-2019, India was Australia’s eighth-most important trading partner and the fifth-largest export market for services.
On the other hand, Australia is becoming a more important destination for Indian exports in terms of value. In the five years leading up to 2019, India’s exports to Australia increased by 10.8%.
According to the Centre for International Economics, an Australia-India FTA may result in a net gain in Australia’s GDP of up to $43 billion and a net gain in India’s GDP of up to $46 billion over 20 years.
When is an FTA between Australia and India likely to happen?
India has several free trade agreements in place, including the South Asia Free Trade Agreement (SAFTA), the India ASEAN Comprehensive Economic Cooperation Agreement (CECA), the India-Korea Comprehensive Economic Partnership Agreement (CEPA), and the India-Japan Comprehensive Economic Partnership Agreement (CEPA).
It’s unclear when Australia and India will agree on an FTA, but Prime Ministers Scott Morrison and Narendra Modi have agreed to talk about a possible deal based on earlier talks as part of the Comprehensive Economic Cooperation Agreement (CECA).
After nine years of discussions, an Australia-India free trade agreement may finally be signed.