3 Years of India–Australia Economic Cooperation and Trade Agreement (ECTA)

• The India–Australia Economic Cooperation and Trade Agreement (INDAUS ECTA) is a landmark bilateral trade pact.
• It was signed in 2022 to strengthen economic ties between India and Australia.
• The agreement aims to double bilateral trade within five years of its implementation.
• INDAUS ECTA is India’s first trade agreement with a developed country in over a decade.

Key Features of India–Australia ECTA

• Trade in Goods: Australia provides 100% duty-free market access for Indian exports.
  • Major beneficiary sectors include textiles, leather, and jewellery.
• Trade in Services and Professional Mobility: Indian students are granted extended post-study work visas.
  • The duration of post-study work visas ranges from 2 to 4 years, depending on qualifications.
  • A dedicated quota has been introduced for “Work and Holiday” visas, enabling youth mobility.
• Safeguards and Regulatory Cooperation: The agreement incorporates robust Rules of Origin.
  • Rules of Origin prevent third-party re-routing, meaning goods from non-member countries cannot misuse benefits.
  • The agreement includes fast-track pharmaceutical approvals, easing market entry for Indian pharma companies.
• Other Provisions: INDAUS ECTA eliminates double taxation on Indian IT offshore income.

India–Australia Economic Relations

• In FY25, India was Australia’s 8th largest trading partner.
• In the same year, Australia was India’s 14th largest trading partner.
• Total bilateral trade between the two countries in FY25 stood at US$ 24.1 billion.
• Key Indian exports include petroleum products, engineering goods, and drugs and pharmaceuticals.
• Key Indian imports from Australia include coal and gold.

Significance of India–Australia Relationship

• Strategic and Geopolitical Significance: India and Australia share a common vision for a free, open, and inclusive Indo-Pacific.
• Indo-Pacific Convergence: Both countries collaborate under the Australia–India Indo-Pacific Oceans Initiative Partnership (AIIPOIP).
• QUAD Pillar: India and Australia are key members of the Quadrilateral Security Dialogue (QUAD), along with the United States and Japan.
• Defence Cooperation: The two countries have signed the Mutual Logistics Support Agreement (MLSA).
  • They conduct high-level military exercises such as Exercise Malabar and AUSINDEX.
• Multilateral Alignment: India and Australia cooperate in forums like the G20, East Asia Summit (EAS), and Indian Ocean Rim Association (IORA).
• Supply Chain Resilience: Both nations are partners in the Supply Chain Resilience Initiative (SCRI).
  • SCRI aims to reduce dependence on single-source supply chains.
• Critical Minerals Partnership: Australia is a major supplier of critical minerals such as lithium and cobalt.
  • These minerals are essential for India’s Electric Vehicle (EV) mission and clean energy transition.