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Posted: Sunday, 05 December 2021 22:32


Australia hopeful of an early FTA with India

Dec 05: India and Australia are reportedly on a super-fast rack to sign a part Foreign Trade Agreement (FTA) before the end of the year, which would perhaps include special duties for the import of Australian wines and better mobility for working professionals and students, according to Tony Abbott, Special Trade Envoy of the Prime Minister of Australia, writes Subhash Arora

If and when that happens, it would perhaps be record for India signing an FTA or a part thereof at a break-neck speed. Dan Tehan, Minister for Trade, Tourism and Investment of Australia, had met India’s dynamic Commerce Minister Piyush Goyal in October this year and officially launched negotiations for a Free Trade Agreement (FTA) between the two countries, aimed at concluding an early harvest agreement by the end of 2021.

According to a news report in The Indian Express, Tony Abbot, the former Prime Minister of Australia and now a special envoy to the current Prime Minister Scott Morrison, who had discussion with Goyal and senior members of his team last week, says, ‘I am confident and they (Indian government) are confident that we can do a very good early harvest deal which is larger rather than smaller, by the end of the year or very early in the new year.”

Early harvest agreements are used to liberalise tariffs on the trade of certain goods between two countries or trading blocs before a comprehensive FTA is concluded.

Abbott noted that the early harvest agreement was likely to deal with granting increased market access to Australian wines as well as help enhance mobility between the two countries. Easing of travel for India professionals has been a consistent demand by India in negotiations with western countries including Australia, the UK and the US. Such a trade deal with India would not only strengthen the Quad (A strategic alliance between Australia, Japan, India and the US) but also set the tone for more such pacts between Australia, India and other major trading countries.

India and Australia had in 2011 launched FTA talks which were subsumed into negotiations under the Regional Comprehensive Economic Partnership negotiations between ASEAN countries.

Australia has been badly bruised by the ‘unfair and unjust punishment’ meted out by China due to apparently political reasons. Although Australia has filed a case against China in WTO, there is unlikely to be any results coming out soon and as a prudent strategy the government had advised the producers to look for newer markets in Asia including India as a substitute market. About $20 billion worth of Australian trade was arbitrarily disrupted or suspended by China, making it very difficult to see it as a trusted partner.

Abbott with his diplomatic experience and insights, reportedly said, “India is in a very different situation. With democracy, the rule of law and a good understanding of business and government being substantially independent of each other and also where the sanctity of contracts is respected, India offers a lucrative market preposition. This is why I think that the difficulties with China mean that India has quite a unique opportunity to step in, particularly where supply chains must be absolutely reliable”.

It remains to be seen if the optimism and enthusiasm shared by Australia will be shared by PM Modi’s government. It took 7 years-from 2007 to 2013 to hold FTA talks with the European Union (EU) which has had a good rapport with the India government. The treaty talks were suspended in 2013 and no further progress was made until the restart button was pushed last year. However, even after the Treaty is signed, it has to be ratified by all the member nations in the European Union and it is expected to take one full year for ratification, as explained by  one of the past European Union Ambassadors in India.

Subhash Arora



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