"Both the parties are committed to building on the momentum created by the ECTA, driving deeper economic integration and achieving the target of trade to reach AUD100 billion by 2030 between India and Australia," the commerce ministry stated.

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India-Australia trade moderates amid ECTA 2nd anniversary

Published on December 29, 2024

“Both the parties are committed to building on the momentum created by the ECTA, driving deeper economic integration and achieving the target of trade to reach AUD100 billion by 2030 between India and Australia,” the commerce ministry stated.

Bilateral Trade Slows to $16.3 Billion

India and Australia’s merchandise trade moderated to $16.3 billion in the current fiscal year through November, reflecting a 4.23% decline compared to the same period last year, according to data from the commerce ministry.

Surge Post-ECTA Implementation

The Economic Cooperation and Trade Agreement

(ECTA), an interim trade pact implemented on December 29, 2022, had initially boosted trade between the two nations. Merchandise trade surged from $12.2 billion in 2020-21 to $26 billion in 2022-23, more than doubling post-agreement.

Despite this initial growth, trade slowed in 2023-24 to $24 billion. However, India’s exports to Australia grew by 14%, signaling potential resilience and growth in certain sectors.

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Sectoral Growth and Diversification

The commerce ministry highlighted notable growth in sectors such as textiles, chemicals, and agriculture, as well as new export categories like gold studded with diamonds and turbojets, showcasing the diversification enabled by the ECTA.

Key Imports

India’s imports from Australia have been pivotal in fueling domestic industries, including:

Metalliferous ores
Cotton
Wood and wood products

The trade partnership’s win-win nature is underpinned by these essential raw material imports, with room for growth identified in sectors like electronics and engineering.

Trade Utilization and Future Prospects

The exchange of crucial trade data revealed export utilization at 79% and import utilization at 84% under the ECTA framework.

Negotiations for a Comprehensive Economic Cooperation Agreement (CECA) are underway, with 10 formal rounds and inter-sessional discussions held so far. This comprehensive pact aims to deepen economic ties and expand opportunities for both nations in diverse sectors.

As the ECTA completes its second year, India and Australia remain committed to leveraging their trade partnership for mutual growth while addressing the recent moderation in trade volumes.