India-Australia Ties Gain Renewed Significance Amid Global Trade Shifts

India Exim Bank’s Study titled ‘Building Bridges: An Economic Analysis of India-Australia Trade and Investment Relations’ was released by Ms Harsha Bangari, Managing Director, India Exim Bank and Mr. John Hopkins, MD & CEO, Export Finance Australia (EFA) on November 21, 2023, during the sidelines of the Asian Exim Bank Forum (AEBF) Annual Meeting held at Sydney, Australia.

AEBF was conceived and initiated by Export-Import Bank of India in 1996 for Asian Export Credit Agencies (ECAs) to exchange information and share ideas in a structured manner. The Asian ECA forum’s principle task is to develop and enhance regional cooperation and forge stronger linkages among its member institutions, thereby fostering a long term relationship within the Asian ECA community. The EFA hosted the 28th AEBF annual meetings under the theme, Export Credits 2040: Future Priorities for an Evolving Landscape.

India Exim Bank’s Study titled ‘Building Bridges: An Economic Analysis of India-Australia Trade and Investment Relations’ was released during the Annual Meetings. The Study provided a bird’s eye view of the growing India-Australia trade and investment relations during the pre- Australia-India Economic Cooperation and Trade Agreement (ECTA) period and how ECTA could bring about a strategic shift in India’s trade and investment relations with Australia. 

With the evolving global scenario, Australia has come to look at India as an important partner in promoting regional security and stability. India-Australia bilateral relationship has developed along a positive track into a strategic partnership. Merchandise trade between India and Australia which stood at US$ 15.6 million in 2012, has increased to US$ 27.8 billion in 2022. While India’s trade relations with Australia have transformed considerably over the last decade, the structure and pattern are yet to be diversified and there lies huge potential for diversifying India’s exports.

The study, employing a revealed comparative analysis, identified Indian exports having a comparative advantage in Australia and provided strategy for enhancing trade in these products. The analysis also delves into the examination of pre-ECTA tariffs, as well as non-tariff barriers and services restrictions impacting trade between India and Australia.

Transforming the ECTA into a Comprehensive Economic Cooperation Agreement (CECA) would build upon ECTA outcomes to capitalise on the potential for closer economic ties between Australia and India. Recognizing the immense potential for mutual growth and shared prosperity as the two nations deepen their ties, the publication outlines strategies to enhance India's bilateral cooperation with Australia including a faster conclusion of CECA.  Some of the potential areas for India-Australia cooperation under the CECA could include support to small and medium  enterprises, promotion of digital trade, trading in geographical indication certified goods, settlement of trade payments in local currencies, strategic alliance for sourcing critical minerals, government procurement, cooperation in international maritime transport services, agri-technology partnership,  entering into mutual recognition agreements and partnership in renewable energy.