The agreement was signed between India and Australia in April of this year.
India and Australia would implement the free trade agreement on a mutually agreed date as the Australian Parliament approved the pact between the two countries on Tuesday.
“BREAKING: Our Free Trade Agreement with India has passed through parliament,” Australian Prime Minister Anthony Albanese said in a tweet.
The India-Australia Economic Cooperation and Trade Agreement (AI-ECTA) needed ratification by the Australian Parliament before its implementation. In India, such pacts are approved by the Union Cabinet.
The agreement was signed between the two countries in April this year.
In a tweet, Commerce and industry minister Piyush Goyal said: “Delighted that the Australian Parliament has Australia Economic Cooperation & Trade Agreement. Our deep friendship sets the stage for us to unleash the full potential of our trade ties & spur massive economic growth.”
Goyal added that there would be harmonisation of codes and customs regime so that “we can enter into force at an early date”. The deal is fair and good for India, he said.
The minister asked the steel industry to take benefit of zero duty in the Australian market and push their exports. Last week, the Joint Standing Committee on Treaties of Australia recommended the Australian government ratify the pact. After the ratification, both sides will decide on a date to implement the pact and customs authorities will also issue a notification a day before the implementation.
Meanwhile, the Australian trade minister, in a statement, said that the ECTA would enter into force 30 days (or another mutually agreed time) after the respective parties have confirmed in writing that they have completed their domestic requirements.
It said that Australian exporters, businesses, workers and consumers will soon reap the opportunities and benefits of more open trade with India with today’s passage of implementing legislation through the Parliament.
“The statement said that the Albanese government has worked hard to expeditiously advance all processes necessary” to ensure that Australia is in a position to implement the free trade agreements before the end of 2022.
The Australia-India Economic Cooperation and Trade Agreement (ECTA) is a great opportunity for Australian businesses as it will open up new markets to reach around 1.4 billion consumers in the world’s fastest-growing major economy, it added.
Australia’s Minister for Trade and Tourism, Don Farrell, said that the agreement would support growing businesses, offer more employment opportunities, and give Australian consumers more choices at the checkout.
He further said that Australia would work closely with the Indian government to implement the trade agreement “as soon as possible”.
The agreement, once implemented, will provide duty-free access to the Australian market for over 6,000 broad sectors of India, including textiles, leather, furniture, jewellery and machinery.
Under the pact, Australia offers zero-duty access to India for about 96.4 per cent of exports (by value) from day one. This covers many products that currently attract 4-5 per cent customs duty in Australia.
Labour-intensive sectors which would gain immensely include textiles and apparel, a few agricultural and fish products, leather, footwear, furniture, sports goods, jewellery, machinery, electrical goods and railway wagons.
India’s goods exports to Australia stood at USD 8.3 billion, and imports from the country aggregated to USD 16.75 billion in 2021-22.
Goyal had earlier stated that the agreement would help take the bilateral trade from USD 27.5 billion to USD 45-50 billion in the next five years.