The Australian Parliament has passed a bilateral free trade agreement with India. The agreements are crucial for Australia to diversify its exports from the struggling Chinese market to India and forge new bilateral trade relationships. The bills passed the House of Representatives easily on Monday and the Senate signed them into law on Tuesday.

“Our Free Trade Agreement with India has passed Parliament,” Australian Prime Minister Anthony Albanese tweeted.

Trade Minister Don Farrell said India had demonstrated its commitment to the bilateral economic partnership by the quality of the agreement reached. “Closer economic ties with India are a key part of the government’s trade diversification strategy,” Farrell said.

The pact also ensures that Australia will not be left out of improved trade and market access that may come from deals India later negotiates with other nations, he said.

“As an interim agreement, however, AI-ECTA is not as comprehensive in scope and coverage as other trade agreements and falls short in areas of potential and immediate interest to Australia. such as wine,” he added.

As Australia moves towards a comprehensive economic cooperation agreement, the Committee noted the importance of improved tariff reductions, better access to services and on broader issues such as intellectual property, cultural heritage, the environment and labor rights, Wilson said.

The Committee, he said, however, expressed concerns about the extent and quality of consultation, the transparency of negotiations and the lack of independent modeling and analysis of trade agreements.

The Standing Joint Treaty Committee was appointed by the Commonwealth Parliament to review and report on all treaty action proposed by the Government before action which binds Australia to the terms of the treaty is taken.

The deal, when implemented, will provide duty-free access to the Australian market for over 6,000 of India’s major sectors, including textiles, leather, furniture, jewelery and machinery.

Under the pact, Australia offers duty-free access to India for approximately 96.4% of exports (by value) from day one. This covers many products that are currently subject to 4-5% tariffs in Australia.

Labor-intensive sectors that would gain hugely include textiles and clothing, some agricultural and fishing products, leather, footwear, furniture, sporting goods, jewelry, machinery, electrical appliances and railway carriages.

India’s merchandise exports amounted to USD 8.3 billion and imports to USD 16.75 billion in 2021-22.

Trade and Industry Minister Piyush Goyal previously said the deal would help boost bilateral trade from the current $27.5 billion to $45-50 billion over the next five years.

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