India, Australia set to finalise mini FTA

What is the News?

India and Australia will be finalising a mini Free Trade Agreement(FTA) called the Early Harvest Agreement.

Note: An Early Harvest deal is a precursor to an FTA in which the trading partners reduce tariff barriers on limited goods to promote trade.

What will be covered in the Early Harvest Agreement?

The agreement is expected to cover a wide range of sectors including textiles, pharma, health, education, renewables, and gems and jewellery.

However, the remaining issues would get covered in the final FTA agreement.

What do Australia and India want in the FTA?

Australia wants a phased tariff reduction for its wines.

On the other hand, India is seeking greater market access for its textiles, footwear, leather, and pharmaceuticals and easier entry for its professionals.

What is the significance of these negotiations on FTA between India and Australia?

The FTA negotiations between India and Australia come against the backdrop of bilateral trade growing by 120% in April-December 2021.

The growth was in line with the Supply Chain Resilience Initiative launched in 2021 to counter China’s dominance in the supply chain in the Indo-Pacific region. 

Moreover, the sharp increase in trade is due to industry awareness and interest in anticipation of a trade pact, especially for Indian textiles, leather, footwear, gems and jewellery.

Source: This post is based on the article “India, Australia set to finalise mini FTA” published in Livemint on 11th Feb 2022.