India-Australia trade pact’s ratification is good, but staying competitive is critical

Source– The post is based on the article “India-Australia trade pact’s ratification is good, but staying competitive is critical” published in The Hindu on 25th November 2022.

Syllabus: GS2- Bilateral groupings and agreements

Relevance: India-Australia trade and economic relations

News- The article explains the recently concluded free trade agreement between India and Australia.

What are the strategic reasons behind this trade pact?

Australia has been particularly upset with what it called the ‘weaponization of trade’ by China.

Countries across the world want to reduce their dependence on China as part of “China plus one strategy”. They want to ensure a resilient supply chain.

There is growing strategic convergence between India and Australia. Both are part of strategic groupings like Quad, the trilateral Supply Chain Resilience Initiative and the Indo-Pacific Economic Forum (IPEF).

What is the way forward for India?

It is critical to remember that trade deals open new doors. They do not automatically mean higher exports or better trade balances, as India’s past pacts with ASEAN and Japan have shown. India should increase its overall global competitiveness.

For further reading– https://forumias.com/blog/india-australia-trade-pact/