By A Special Correspondent
First publised on 2022-04-04 08:06:17
It is heartening to note that in these troubled times when the pandemic and the war in Ukraine have had adverse affect on globalization (WTO has cut its global trade growth forecast in 2022 from 4.7% to just 2.5%), India and Australia have signed a bilateral trade agreement that allows a host of items to be imported and exported between the two countries either totally free of duty or on concessional rates. This was an issue that was being discussed by the two sides for the last 10 years.
Now, Australia can export wool, coal, alumina and other ores, LNG and many other items duty-free to India while they can import gem & jewelry, textile, apparel, engineering goods and several other items from India without any duty. Duty on some other items has also been drastically reduced to facilitate better trade between the two countries. Prime Minister Modi called the agreement a "watershed moment" in bilateral relations while his Australian counterpart Scott Morrison said that it opens a big door to the world's fastest-growing major economy" for Australia exporters.
In addition to this, Australia will also recognize a number of medical and technical degrees from India, opening up the chances of Indian talent to get work in that country. It has also revised visa rules and made it easier for Indians to apply and get longer work visas. It is expected that with the revised duty structure and easing of rules, the bilateral trade will jump from $27bn now to $50bn in the next five years. This will be in addition to the expected inflow of remittances from those who will go to Australia for work.
India and Australia have traditionally been close. But now, with China flexing its muscles on the sea routes, and with the emergence of Quad, this friendship will scale greater heights. Both India and Australia feel threatened by China's increasing desire to control the sea routes and along with Japan and the US, will like to cooperate to keep them free from Chinese control.